Jump Hospital currently allocates all maintenance department costs on department square feet. However, the manager of the pharmacy department has suggested that an Activity-Based Costing (ABC) approach be used for the portion of the maintenance department cost that relate to repairing equipment. However, it must subsidize many high-tech departments that require expensive equipment repairs. Using the following data, calculate the maintenance cost assigned to the pharmacy using the existing method and using an ABC approach:

Maintenance Costs Routine Maintenance Repairs Total

Volume (square Feet) 100,000 800

Labor Hours 10,000 4,000 14,000

Labor Costs/Hour $12.00 $18.00 $13,71

Supplies $20,000 $80,000 $100,000

Administration $15,000

Department Information Pharmacy All Other Departments Total

Square Feet 2,000 98,000 100,000

Volume of Repairs 3 797 800

Hours of Repairs 6 3,994 4,000

Supplies Used for Repairs $200 $79,800 $80,000