General Admin	Maintenance	Housekeeping	Cafeteria	Emergency Room	Labor and Delivery	Surgery	Intensive Care Unit	Radiology	General Med/Surg	Opthamology	Psychiatry	Long-term Care	Physical Therapy	Palliative Care	Coronary Care
	Direct Overhead	$ 753,547	$ 548,687	$ 654,853	$ 996,452	$ 512,475	$ 624,239	$ 179,612	$ 125,132	$ 428,129	$ 415,091	$ 450,316	$ 358,314	$ 546,974	$ 104,291	$ 267,706	$ 184,130
	Payroll dollars	$ 542,568	$ 227,927	$ 456,852	$ 525,458	$ 1,024,950	$ 1,248,478	$ 359,224	$ 250,264	$ 856,258	$ 830,182	$ 900,632	$ 716,628	$ 1,093,948	$ 208,582	$ 535,412	$ 368,260
	Total Assets	$ 807,052	$ 398,312	$ 393,907	$ 435,127	$ 703,617	$ 850,583	$ 181,217	$ 237,380	$ 849,170	$ 793,965	$ 724,377	$ 547,952	$ 1,041,184	$ 206,694	$ 492,682	$ 268,154
	Patient Days	-	-	-	-	7,452	2,816	13,082	3,050	5,662	3,983	1,448	1,581	8,715	4,000	716	4,795
	Employees	5	3	8	9	11	13	5	4	10	10	10	9	12	3	7	5

Basic hospital has twelve producing departments and four supporting departments. The budgeted data above pertain to these sixteen departments, and the allocation statistics table below identifies the allocation bases used to distribute the costs of each supporting department.

ALLOCATION STATISTICS TABLE
Dept.	Statistic
General Admin	Payroll dollars
Maintenance	Total Assets
Housekeeping	Patient Days
Cafeteria	# of employees

*Step method support department rankings are based on the proportion of the total payroll dollars, where the support department with the most payroll dollars is ranked #1.

Required:

1. Create a table (Table 1) showing the allocation of supporting departments to producing departments using the direct method. See example 7.3 from the textbook for guidance on preparing the allocation schedule.
2. Create a table (Table 2) showing the allocation of supporting departments to producing departments using the sequential method. (See example 7.4 for guidance)
3. Create a table (Table 3) showing the comparison of the two allocation methods. Table 3 should be a summary table. It should have columns for total amounts allocated for each method. It should also have a column for the difference between the two methods. Rows should exist for each producing department. For Example:

Table Title
	Direct Method	Step Method	Difference
Producing Dept. A	$ X	$ Y	$Y - $X
Producing Dept. B	$ A	$ B	$B - $A
...	...	...	...
Producing Dept. L	$ L	$ M	$ M - $ L
Totals	Sum	Sum	Sum

4. If the hospital is currently using the direct method, do you think (based on the differences you see) that they should switch to the sequential method? Write up your recommendation to the management of Basic Hospital