Question
FPPT Clinic offers Family Practice and Physical Therapy services at its location. The Family Practice Department generates $4,000,000 in revenue per year and the Physical
FPPT Clinic offers Family Practice and Physical Therapy services at its location. The Family Practice Department generates $4,000,000 in revenue per year and the Physical Therapy Department generates $850,000 in revenue per year.
The Family Practice Department occupies 80,000 square feet and the Physical Therapy Department occupies 40,000 square feet.
Expenses for the departments are:
| Family Practice | Physical Therapy |
Salaries/Wages & Benefits | $1,885,000 | $400,000 |
Other Expenses | $1,226,000 | $261,111 |
The Clinic is supported by three cost centers Human Resources, Accounting, and Housekeeping services. Cost for those services are:
- Human Resources: $100,000
- Accounting: $100,000
- Housekeeping: $75,000
Allocate the costs for each of the three cost centers to the Family Practice Department and Physical Therapy Department. For each cost center, select a driver that you think is fair and allocate the cost pool for that cost center.
Complete a P&L for the Family Practice Department and for the Physical Therapy Department. Show all work using Excel formulas.
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