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The Housekeeping Services department of Toy Clinic, a multi-specialty practice in Toledo, Ohio, had $100,000 in direct costs during 2004. These costs must be allocated to Ruger's three revenue-producing patient services departments using the direct method. Two cost drivers are under consideration: patient services revenue and hours of housekeeping services utilized. The patient services departments generated $5 million in total revenues during 2004, and to support these clinical activities, used 5,000 hours of housekeeping services.

What is the allocation rate if:

  • Patient services revenue is used as the cost drive
  • Hours of housekeeping services is used as the cost driver.

Reference no: EM132200365

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