Revenues Expenses Using the same numbers as we will calculate using the Step-Down Method. In this example, it has been determined to step-down Facilities expenses to the rest of the support departments and to the direct or patient service areas. Department Facilities (support dep Space (square Feet) Number of Precedores 1,500,000 10,000 Accounting Billing (support dept) $ 2,000,000 20,000 Total for Support Departments $ 3,300,000 30.000 Routine Care (patient services) $ 30,000,000 $ 10,000,000 150,000 500,000 Intensive Care (patient services) $ 25,000,000 $ 8,000,000 100,000 450,000 Diagnostic Services (patient services) $ 20,000,000 $ 6,000,000 75,000 375,000 Total for Patient Service Departments Grant Total 75,000,000 $ 24.000.000 325,000 1321000 $ 75,000,000 S 27,500,000 355,000 1.325.000 #8. Facilities has a total cost pool of $1,500,000. The cost driver has been determined to square footage. What would be the new allocation rate be for facilities? Choice A: $4.35 per square foot Choice B: $5.51 per square foot Choice C: $4.62 per square foot Choice D: $75,000,000 dollars # 9. How much would Facilities expense be allocated to the Accounting/Billing Department? Choice A: Nothing it is an indirect department Choice B: $75,000 Choice C: $87,000 Choice D: $92,000 # 10. After the allocation of Facilities to the Accounting/Billing department - what would be the new cost pool for the Accounting / Billing Department? Choice A: $2,087,000 Choice B: $3,000,0000 Choice C: $5,000,000 Choice D: $100,000,000,000 (Hint- this is not the correct answer) 11. Accounting Billing has a total cost pool of $2,087,000. The cost driver has been determined to number of procedures. What would the allocation rate be for Accounting/Billings? Choice A: $11.31 per procedure Choice B: $1.58 per procedure Choice C: $3.32 per procedure Choice D: $8.00 per procedure nd # 12. Now that you have calculated the new allocation rate for Accounting/Billing. What is the amour of Accounting/Billing's related expense that you would allocate to the Routine Care Department? Choice A: $790,000 Choice B: $650,000 Choice C: $755,000 Choice D: $975,000 Alleration ental work Hints Chapter 6 # 13. What would be the total expense for the Routine Care department (this is the addition of direct department expenses and allocated indirect costs). Choice A: $712,750 Choice B: $1,593,000 Choice C: $11,442,500 Choice D: $6,919,780 Home