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State College Hospital has two support departments and two patient services departments. The direct costs for each of the support departments are: General Administration $1,000,000
State College Hospital has two support departments and two patient services departments. The direct costs for each of the support departments are: General Administration $1,000,000 Facilities $3,000,000 Department Housekeeping hours Salary Dollars Support: General Administration 2,000 $1,000,000 Facilities 3,000 2,000,000 Total 5,000 3,000,000 Patient Services: Routine Care 80,000 $6,000,000 Intensive Care 15,000 1,000,000 Total 95,000 7,000,000 Grand Total 100.000 10,000,000 Now, assume that the hospital uses the step-down method for cost allocation, with salary dollars as the cost driver for General Administration, and housekeeping hours for facilities. Assume also that General Administration provides the most services to other support departments. 1. Determine the allocation rates for general administration and facilities costs (show all calculations below): 2. Allocate the hospital's overhead costs to the routine care department only (show all calculations below): MacBook Air SO H88 ca F DI DD
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