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Pleasant View Clinic has three service departmentsFood Services, Administrative Services, and XRay Services. The costs of these departments are allocated by the stepdown method, using
Pleasant View Clinic has three service departmentsFood Services, Administrative Services, and XRay Services. The costs of these departments are allocated by the stepdown method, using the allocation bases and in the order shown below: Costs Service Department Incurred Base for Allocation Food Services Variable Meals served Fixed Peak-period needs Administrative Services Variable Files processed Fixed 16% Xra3,r ServicesJ 26% Outpatient Clinic, 36% GB Care, and 46% General Clinic X-Ray Services Variable X-rays taken Fixed Peakperiod needs Estimated cost and operating data for all departments in the clinic for the forthcoming month are presented below: Food Admin . X Ray Outpatient OB General Services Services Services Clinic Care Clinic Total Variable costs $ 73,156 $ 6,866 $38,166 $11,?66 $ 14,856 $ 53,466 $198,666 Fixed costs 48,666 33,646 59,526 26,958 99,738 344,744 612,666 Total costs $121,156 $39,846 $97,626 $38,658 $114,588 $398,144 $816,666 Meals served 1,666 566 7,666 36,666 38,566 Percent of peakperiod Food Services needs 2% 1% 17% 86% 166% Files processed 1,566 3,666 966 12,666 17,466 Xerays taken 1,266 356 8,466 9,956 Percent of peakperiod XRay Services needs 13% 3% 84% 166% All billing in the clinic is done through the Outpatient Clinic, 06 Care, or General Clinic. The clinic's administrator wants the costs of the three service departments allocated to these three billing centres. Required: Prepare the cost allocation desired by the clinic administrator. Include under each billing centre the direct costs of the centre as well as the costs allocated from the service departments. {Amounts to be deducted should be indicated with minus sign.) Variable costs Food Services allocation: Total variable costs Fixed costs Food Services allocation: 2% 1% 17% 80% Admin. Services allocation: 10% 20% 30% 40% X-Ray Services allocation: 13% 3% 84% Total fixed costs Total overhead costs
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