Problem #1: St. Francis Medical Center

St. Francis Medical Clinic has two service departments: Building Operations and Utilities, and three operating departments: Rehabilitation, Preventative Medicine, and Geriatrics. St. Francis Medical Clinic allocates the cost of Building Operations based on square footage and Utilities based on patient days.

Budgeted operating data for the previous year are presented below:

	Service Departments		Operating Departments
	Building Operations	Utilities	Rehabilitation	Preventative Medicine	Geriatrics
Budgeted costs before allocation	$20,000	$10,000	$90,000	$60,000	$100,000
Square Footage	1,000	4,000	6,000	18,000	12,000
Patient Days	-	-	5,500	7,700	8,800

Required:

a.	Prepare a schedule to allocate service department costs to operating departments by the direct method (round all dollar amounts to the nearest whole dollar).
		P1	P2	P3
S1
S2
Direct Costs
Total
b.	Prepare a schedule to allocate service department costs to operating departments by the step method, allocating Building Operations first (round all amounts to the nearest whole dollar).

	S1	S2	S3	P1	P2	P3
Direct Costs
S1
S2