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Problem 2 Tacoma Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows:
Problem 2 Tacoma Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows: Direct Costs Cost Driver General Administration Facilities Financial Services Total $2,000,000 Patient Services Revenue $5,000,000 3,000,000 Patient Services Revenue Space (square feet) $10,000,000 The patient services revenue and space utilization (square feet) foreach department are as follows: Patient Services RevenueSpace (square feet) Routine Care Intensive Care Diagnostic Services Other Services Total $30,000,000 $4,000,000 $6,000,000 $10,000,000 $50,000,000 400,000 40,000 60,000 100,000 600,000 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 a. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments
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