i need help with question 6.3

did you mean exhibit 6.7?

St. Benedict'sHospital has three support departments and four patient services The following data pertain to problems 6.3 through 6.6 departments. The direct costs to each of the support departments are as follows $2,000,000 5,000,000 3,000,000 General Administration Facilities Financial Services Selected data for the three support and four patient services departments are shown below: Space (square Housekeeping feet Patient Salary Dollars Services Labor Hours Revenue Department Support: 2,000 $ 1,500,000 10,000 General Administration 5,000 3,000,000 20,000 Facilities 3,000 15,000 45,000 10,000 2,000,000 $ 6,500,000 Financial Services Total Patient Services 150,000 $12,000,000 $30,000,000 400,000 Routine Care 30,000 5,000,000 6,000,000 4,000,000 40,000 Intensive Care Diagnostic Services 6,000,000 60,000 10,000,000 100,000 $50,000,000 600,000 $50,000,000 645,000 15,000 25,000 220,000 230,000 $36,500,000 7,000,000 Other Services Total $30,000,000 Grand Total 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. C a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments. In clds ree ngr he total cage aveny aenr s0's Exhib ge ase .3 of $25,450 1. Brietly Hospital 2. What un 3. What ar 4. What is Cost Alloca At this point, time and etfo: Kensington's now know the including ind Exhibi departments bives. In effec the patient venues and. departments. nly direct ments are pr ieast tempora Note defined as outine care Whuch can ts when auoad gn valu EXHIBIT 6.7 Kensington Hospital: Final Allocations Patient Services Department Support Department (allocation rate) Routine Care Laboratory Radiology Financial Services (So.05556) x $16,000,o00 888.960 x $5.000,000 277.800 x $6,000,000- 333.360 Facilities ($12.64) 199,800 2.525.472 39.600 500,544 61,200 773.568 Housekeeping ($17.58) 76,000 1,336,080 6,000 105.480 9.000 158,220 Administration (So.432) 5.709,000 2,466,288 2,035.000 879,120 2,439.000 1,053,648 Personnel (S0.250) 5.709,000 1,427,250 2,035.000 508,750 2,439,000 609.750 Total indirect costs $ 8,644,050 $ 2,271,694 $ 2,928,546 Direct costs $ 5.500,000 $ 3.300,000 $ 2,800,000 Total costs $14,144.050 $ 5.571,694 $5.728,546 Total indirect costs $8,644,050+ $2,271,694+ $2,928,546 $13,844,290. Total costs $14,144,050+ $5,571,694+ $5.728,546 $25,444,290. Note: Because of rounding in the allocation process, the totals here differ slightly from the values contained in Exhibit 6.3. St. Benedict'sHospital has three support departments and four patient services The following data pertain to problems 6.3 through 6.6 departments. The direct costs to each of the support departments are as follows $2,000,000 5,000,000 3,000,000 General Administration Facilities Financial Services Selected data for the three support and four patient services departments are shown below: Space (square Housekeeping feet Patient Salary Dollars Services Labor Hours Revenue Department Support: 2,000 $ 1,500,000 10,000 General Administration 5,000 3,000,000 20,000 Facilities 3,000 15,000 45,000 10,000 2,000,000 $ 6,500,000 Financial Services Total Patient Services 150,000 $12,000,000 $30,000,000 400,000 Routine Care 30,000 5,000,000 6,000,000 4,000,000 40,000 Intensive Care Diagnostic Services 6,000,000 60,000 10,000,000 100,000 $50,000,000 600,000 $50,000,000 645,000 15,000 25,000 220,000 230,000 $36,500,000 7,000,000 Other Services Total $30,000,000 Grand Total 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. C a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments. In clds ree ngr he total cage aveny aenr s0's Exhib ge ase .3 of $25,450 1. Brietly Hospital 2. What un 3. What ar 4. What is Cost Alloca At this point, time and etfo: Kensington's now know the including ind Exhibi departments bives. In effec the patient venues and. departments. nly direct ments are pr ieast tempora Note defined as outine care Whuch can ts when auoad gn valu EXHIBIT 6.7 Kensington Hospital: Final Allocations Patient Services Department Support Department (allocation rate) Routine Care Laboratory Radiology Financial Services (So.05556) x $16,000,o00 888.960 x $5.000,000 277.800 x $6,000,000- 333.360 Facilities ($12.64) 199,800 2.525.472 39.600 500,544 61,200 773.568 Housekeeping ($17.58) 76,000 1,336,080 6,000 105.480 9.000 158,220 Administration (So.432) 5.709,000 2,466,288 2,035.000 879,120 2,439.000 1,053,648 Personnel (S0.250) 5.709,000 1,427,250 2,035.000 508,750 2,439,000 609.750 Total indirect costs $ 8,644,050 $ 2,271,694 $ 2,928,546 Direct costs $ 5.500,000 $ 3.300,000 $ 2,800,000 Total costs $14,144.050 $ 5.571,694 $5.728,546 Total indirect costs $8,644,050+ $2,271,694+ $2,928,546 $13,844,290. Total costs $14,144,050+ $5,571,694+ $5.728,546 $25,444,290. Note: Because of rounding in the allocation process, the totals here differ slightly from the values contained in Exhibit 6.3