Reference no: EM131928185

Use the following data to answer the question 6.3 (a&b): PLEASE NOTE THAT THE CHART BELOW DOES NOT LINE UP PROPERLY WHEN I SUBMIT THE QUESTION, NOTE THAT I SUBMITTED THIS QUESTION A FEW TIMES.  THE FIRST 4 LINE TOTALS SHOULD START WITH $0.00 FOR THE PATIENT SERVICES REVENUE AND THEN MOVE TO THE RIGHT TO SQUARE FEET AND SO ON.  PLEASE HELP! I NEED TO FIGURE THIS OUT BEFORE MIDNIGHT! I CAN PAY MORE BASED ON THE COMPLEXITY OF THE PROBLEMS. THANK YOU.

St. Benedict's Hospital has three support departments and four patient services departments. The direct cost to each of the support departments is 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 service departments are shown below:

Department       Patient Services Revenue      Square feet   Housekeeping Labor Hours Salary dollars

Support:

General Admin     $0.00           10,000         $2,000    $1,5000,000

Facilities                $0.00                   20,000 $45,000   $3,000,000

Financial Services  $0.00         15,000              $3,000              2,000,000

Total             45,000 $10,000         $6,500,000

Patient Services:

Routine Care $30,000,000     400,000   $150,000      $12,000,000

Intensive Care                $4,000,000        40,000     $30,000             $5,000,000

Diagnostic Services            $6,000,000   60,000      $15,000          $6,000,000

Other Services  $10,000,000 100,000   $25,000       $7,000,000

Total $50,000,000          600,000     220,000            $30,000,000

GRAND TOTAL:    $50,000,000          645,000     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 and patient services revenue, while the cost driver for facilities is space utilization.

a.) What are the appropriate allocation rates?

b.) Use the table below to allocate the hospitals overhead costs to the patient services departments. Fill in the chart below:

Support Department Allocation Rate Routine Care   Intensive Care  Diagnostic Services Total

General Admin _____________ ___________   _____________ __________________ _________

Facilities _____________ ___________   _____________ __________________ _________

Financial Services _____________ ___________    ____________ __________________ _________

Total Indirect Costs _____________ ___________    ____________ __________________ __________