You first are curious about what the projected net income would be for both the routine care and orthopedics departments after the move. You know this move may have a big impact on your bonus. Using Table 18-6 and Table 18-7 expansion allocation 1, allocate the indirect expenses to both the routine care and orthopedic care departments. Once allocated, you will be able to determine the projected net income for both departments.

Revenues Direct Expenses Allocations Without Expansion Expansion Allocations 1 Alternative Expansion Allocations 2 Routine Care Orthopedics Routine Care Orthopedics Routine Care Orthopedics $2,050,000 $1,301,000 $2,650,000 $1,550,000 $2,650,000 $1,550,000 Salaries and benefits $1,350,000 $900,000 $1,687,500 $1,044,000 $1,687,500 $1,044,000 Supplies $306,000 $204,000 $382,500 $244,800 $382,500 $244,800 Total direct expenses $1,656,000 $1,104,000 $2,070,000 $1,288,800 $2,070,000 $1,288,800 Indirect Expenses Facilities expense $205,000 $130,100 $318,000 $186,000 $336,000 $168,000 *General overhead $102,500 $65,050 $132,500 $77,500 $140,000 $70,000 Total indirect expenses $307,500 $195,150 $450,500 $263,500 $476,000 $238,000 Net Income $86,500 $1,850 $129,500 ($2,300) $104,000 $23,200