What is the step-by-step process to this answer?

Cost Allocation Exercise

Use the Direct Method Approach

Projected Revenues by patient services department

Amount Routine care $24,000,000

Laboratory $15,000,000 Radiology $14,000,000

Total Revenues $53,000,000

Projected Costs for all departments: Patient Services Departments (Direct Cost)

Routine care $18,000,000

Laboratory $8,000,000

Radiology $7,000,000

Total Costs $33,000,000

Support Services Department (Overhead Costs)

Financial Services $3,000,000 Facilities $5,600,000

Housekeeping $3,000,000

Administration $4,000,000

Human Resources $2,400,000

Totals Costs $18,000,000

Total Costs of both patient and support services $51,000,000

Projected Profit $2,000,000