14 Jun Question Question 1 St. Elsewhere Hospital has th
Question
Question 1
St. Elsewhere Hospital has three support departments and three patient services departments. The direct costs to each of the support departments are as follows:
General Administration $12,000,000
Maintenance and Housekeeping 25,000,000
Human Resources 4,500,000
Use the following data in this question:
St. Elsewhere Hospital has three support departments and three patient services departments. The direct costs to each of the support departments are as follows:
General Administration $12,000,000
Maintenance and Housekeeping 25,000,000
Human Resources 4,500,000
Use the following data in this question:
Department
Patient Service Revenue
Space (in square footage)
Number of Employees
Support:
General Administration
5,000
20
Maintenance and Housekeeping
6,000
100
Human Resources
2,000
8
Total
13,000
128
Patient Services:
Primary Care
$80,000,000
400,000
500
Intensive Care
70,000,000
100,000
250
Elder Care
40,000,000
50,000
400
Total
$190,000,000
550,000
1,150
Grand Total
$190,000,000
563,000
1,278
(1) Assume that St. Elsewhere uses the direct method for cost allocation. The cost driver for General Administration is patient service revenue, the cost driver for Maintenance and Housekeeping is space utilization, and the cost driver for Human Resources is the number of employees.
A) The allocation rate for General Administration is $
B) The allocation rate for Maintenance & Housekeeping is $
C) The allocation rate for Human Resources is $
(2) Allocate the support costs to the patient service departments.
(A) Amount Allocated from General Administration to Primary Care is $
(B) Amount Allocated from General Administration to Intensive Care is $
(C) Amount Allocated from General Administration to Elder Care is $
(D) Amount Allocated from Maintenance & Housekeeping to Primary Care is $
(E) Amount Allocated from Maintenance & Housekeeping to Intensive Care is $
(F) Amount Allocated from Maintenance & Housekeeping to Elder Care is $
(G) Amount Allocated from Human Resources to Primary Care is $
(H) Amount Allocated from Human Resources to Intensive Care is $
(I) Amount Allocated from Human Resources to Elder Care is $
(3) Now assume that St. Elsewhere uses the step-down method of cost allocation. Assume that General Administration provides the most services to the other support departments, followed by maintenance and housekeeping, and then human resources
A) The allocation rate for General Administration is $
B) The allocation rate for Maintenance & Housekeeping is $
C) The allocation rate for Human Resources is $
(4) Allocate the support costs to the patient service departments.
(A) Amount Allocated from General Administration to Primary Care is $
(B) Amount Allocated from General Administration to Intensive Care is $
(C) Amount Allocated from General Administration to Elder Care is $
(D) Amount Allocated from Maintenance & Housekeeping to Primary Care is $
(E) Amount Allocated from Maintenance & Housekeeping to Intensive Care is $
(F) Amount Allocated from Maintenance & Housekeeping to Elder Care is $
(G) Amount Allocated from Human Resources to Primary Care is $
(H) Amount Allocated from Human Resources to Intensive Care is $
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