Q1. Based on the information given, allocate support (overhead) departments costs to patient service departments using 1) direct method and 2) step-down method. You can submit your answer in an excel spreadsheet format. St. Benedicts Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows: General Administration $ 2,000,000 Facilities $ 5,000,000 Financial Services $ 3,000,000 Selected data for the three support and four patient services departments are shown below: Patient Service Revenue Space (sq. ft.) Housekeeping Labor Hours Salary Dollars Support: General Administration 10,000 2,000 1,500,000 Facilities 20,000 5,000 3,000,000 Financial Services 15,000 3,000 2,000,000 Total 45,000 10,000 6,500,000 Patient Services: Routine Care $30,000,000 400,000 150,000 $12,000,000 Intensive Care 4,000,000 40,000 30,000 5,000,000 Diagnostic Services 6,000,000 60,000 15,000 6,000,000 Other Services 10,000,000 100,000 25,000 7,000,000 Total $50,000,000 600,000 220,000 $30,000,000 Grand Total $50,000,000 645,000 230,000 $36,500,000 There are three support departments and four patient service departments. When allocating costs, cost drivers (for both the direct method and step-down method) are as follow: Support Department Cost Driver Facilities Space (sq. ft.) Financial Services Salary Dollars General Admin Patient Services Revenues The direct costs to each of the services departments are as follows: Routine Care $ 6,000,000 Intensive Care $ 4,000,000 Diagnostic Services $ 5,000,000 Other Services $ 3,000,000 For the step-down method, you need to allocate in the order of 1) Facilities, 2) Financial Services, and 3) General Administration. When using the step-down method, you must NOT use any information about those departments that you already allocated. a) What are the total costs of patient services departments? Allocate the overhead costs of the services department using the direct AND step-down methods. b) If you were the Department Head of Routine Care, which cost allocation method would you prefer based on your cost allocation results in part a? please provide step by step calculations.