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I need help with problem 6.3 of the book Healthcare Finances 6th edition Jaument | v kh | I LIU d as the cost driver?
I need help with problem 6.3 of the book Healthcare Finances 6th edition
Jaument | v kh | I LIU d as the cost driver? in the rocatie Ich department reren is the dar allocatie allocation to each dep u t A is better? Why? of hareketing support is used What is the erence in the alle thendrerit the dress retter .. A batient services as follow artments and four patie, ort departments are as fo $2,000,000 5,000,000 3,000,000 r patient services departm partments ate Am 0.3 ron 66 How has the support departe The direct to each of the sun General Administration Facines Financial Services Solted data for the three support and four pari shown below Space Patient Services Revenue square feet Housekeeping Labor Hours Salary Dollars 10,000 2,000 $ 1,500,000 Department ST General Administration 3,000,000 Facilities Financial Services 5,000 3,000 10,000 2,000,000 $ 6,500,000 150.000 20,000 15,000 45,000 Total Patient Service Routine Care $30,000,000 400,000 Intensive Care 4,000,000 40,000 Diagnostic Services 6,000,000 60,000 Other Services 10,000,000 100,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 30,000 15,000 25,000 220,000 230,000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial dent services revenue, while the cost driver for facilities is space utilization a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to a hospital's overhead costs to the patient serv to Exhibit 6.7 to allocate the to the patient services departments
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