problem 6.3

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 and the cost driver for facilities is space utilization

a. what are the appropriate allocation rates?

b. create an allocation table to allocate the hospitals overhead cost to the patient services departments

The following data pertai llowing data pertain to problems 6.3 through 66 Benedict's Hospital has three support has three support departments and four patient ser- The direct costs to each of the support departments are $2,000,000 vices departments. The di General Administration Facilities 5,000,000 Financial Services 3,000,000 ta for the three support and tour patient services departments are Selected data for the th Patient Services Revenue Space (Square Housekeeping Feet) Labor Hours Salary Dollars 10,000 2,000 $1,500,000 Department Support: General Administration Facilities Financial Services Total 20,000 15,000 5,000 3,000 3,000,000 2,000,000 45,000 10,000 $6,500,000 150,000 30,000 Patient Services: Routine Care Intensive Care Diagnostic Services Other Services $30,000,000 400,000 4,000,000 40,000 6,000,000 60,000 10,000,000 100,000 $12,000,000 5,000,000 6,000,000 7,000,000 25,000 220,000 $30,000,000 Total $50,000,000 600,000 230,000 $36,500,000 $50,000,000 645,000 Grand Total