Problem 1. David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer the question.

Based on the scenario above, what are the Endoscopy Department's total expenses?

	SQUARE FOOTAGE	SQAURE FOOTAGE	LAB TESTS
UTILITIES		200,000
ADMINISTRATION	2,000	500,000
LABORATORY	2,000	625,000
DAY-OP SUITE	3,000	1,400,000	4,000
CYSTOSCOPY	1,500	350,000	500
ENDOSCOPY	1,500	300,000	500
TOTAL	10,000	3,625,000	5,000