Question
Table 1. Cost Allocation Data Basic statistics for cost allocation for the BestCare surgery clinic A B C Square feet Dept. costs Lab tests Utilities
Table 1. Cost Allocation Data | |||||||
Basic statistics for cost allocation for the BestCare surgery clinic | |||||||
A | B | C | |||||
Square feet | Dept. costs | Lab tests | |||||
Utilities | $300,000 | ||||||
Administration | 3,000 | $800,000 | |||||
Laboratory | 5,000 | $900,000 | |||||
Day-Op Suite | 6,000 | $1,900,000 | 6,000 | ||||
Cystoscopy | 3,000 | $700,000 | 3,000 | ||||
Endoscopy | 3,500 | $750,000 | 3,000 | ||||
Total | 20,500 | $5,350,000 | 12,000 | ||||
You are the new administrator of BestResults surgery clinic, and need to identify a good method for allocating the indirect costs for your organization. The indirect costs consist of utilities and administration costs. You decide to use a step-down method, and choose the square feet as an allocation basis for utilities, and department costs as an allocation basis for administration costs. Using the table titled "Cost Allocation" (inserted in this problem description), construct the appropriate steps that are needed to complete the cost allocation, and choose the correct allocation % for utilities among the departments: a. Admin 12 %, Lab 23%, Day-Op suite 22%, Cystoscopy 16 %, Endoscopy 16 % b. Admin 10%, Lab 29%, Day-Op suite 26%, Cystoscopy 14 %, Endoscopy 18 % c. Admin 22 %, Lab 22%, Day-Op suite 25%, Cystoscopy 20 %, Endoscopy 10 % d. Admin 15 %, Lab 24%, Day-Op suite 29%, Cystoscopy 15 %, Endoscopy 17 %
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