The following data pertain to problems 0.3 through 6.6 St. Benedict's 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: Salary Dollars $ 1,500,000 3,000,000 2.000.000 $ 6,500,000 Patient Space Services (square Housekeeping Department Revenue feet) Labor Hours Support: General 10,000 2,000 Administration Facilities 20,000 5,000 Financial Services 15,000 3,000 Total 45,000 10,000 Pasient Services: Routine Care $30,000,000 400,000 150,000 Intensive Care 4,000,000 40,000 30,000 Diagnostic Services 6,000,000 60,000 15,000 Other Services 10.000.000 100.000 25,000 220,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 230,000 $12,000,000 5,000,000 6,000,000 7,000,000 $30.000.000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments, Copying and distribution of this PDF is prohibited without written permission For permission, please contact Copyright Clearance Center at www.copyright.com 227 and Cost Allocation