Question
St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are: General Administration $227,412
St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are: General Administration $227,412 Facilities 471,025 Financial Services 271,387 Selected data for the three support and four patient services departments are: Department Patient Services Revenue Space (Square Feet) Housekeeping Labor Hours Salary Dollars Support General Administration 1,182 202 142,624 Facilities 17,069 5,754 3,192,060 Financial Services 1,688 278 164,387 Patient Services Routine Care $3,106,855 43,256 14,771 1,281,600 Intensive Care 355,395 4,458 2,601 406,497 Diagnostic Services 668,037 6,518 1,369 571,465 Other Services 908,202 8,128 2,989 656,367 Assume that the hospital uses the step-down method for cost allocation, with salary dollars as the cost driver for general administration, housekeeping labor hours as the cost driver for facilities, and patient services revenue as the cost driver for financial services. Assume also that the general administration department provides the most services to other support departments, followed closely by the facilities department. The financial services department provides the least services to the other support departments. Given these data, how many cost dollars will be allocated from General Administration to Facilities?
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