The following data pertain to problems 4.6 through 4.8. St. Benedict's Hospital has three support departments and four patient se ments. The direct costs to each support department are: General Administration Facilities Financial Services $2,0oo,000 5,000,000 3.000,00o Selected data for the three support and four patient services departments are as fo Patient Services Revenue(Square Feet) SpaceHousekeeping Labor Hours Salary Dollars Department Support General 2,000 $ 1,500,000 10,000 Administration Facilities Financial Services Total 20,000 5,000 15,000 2,000,000 45,00010,0006500,000 Patient services Routine Care Intensive Care Diagnostic Services Other Services Total S30,000,000400,000 40,000 60,000 100,000 150,000 $12,000,000 4,000,000 6,000,000 10,000,000 30,000 15,000 25,0007.000,000 5,000,000 $50,000,000600,000220,000$30,000,000 Grand total $50,000,000645,000 230,000 $36,500,000 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 usage. a. What are the appropriate allocation rates? b. Allocate the hospital's overhead costs to the patient services departments. 4.6 7 Assume that the hospital uses the direct method for cost allocation. Furthermore, salary is the cost driver for General Administration, housekeeping labor hours is th cost driver for Facilities, and patient services revenue is the cost driver for Finan- cial Services. (The majority of the costs of the Facilities Department are devoted to housekeeping services.) a. What are the appropriate allocation rates? b. Allocate the hospital's overhead costs to the patient services departments. c. Compare the dollar allocations with those obtained in problem 4.6. Explain the differences. d. Which of the two cost-driver schemes is better? Explain your answer. 4.8 Now assume that $2 million of Financial Services costs are related to billing and managerial reporting and $ million are related to payroll and personnel manage- ment activities. a. Devise and implement a direct method cost allocation scheme that recognizes that Financial Services has two widely different functions. b. What, f any, additional information would be useful in completing part a? c. What are the costs and benefits to St. Benedict's of creating two cost pools for Financial Services