Reference no: EM132200186
Assume that the three patient services departments in are Adult Services, Pediatric Services, and Other Services. The patient services revenue and hours of housekeeping services for each department are:
Department Revenue Housekeeping Hours
Adult Services $3,000,000 1,500
Pediatric Services 1,500,000 3,000
Other Services 500,000 500
Total $5,000,000 5,000
(a) I need the dollar allocation to each patient services department if patient services revenue is used as the cost drive.
(b) I need the dollar allocation to each patient services department if hours of housekeeping support is used as the cost driver.
(c) I need the difference in the allocation to each department between the two drivers.
(d) of the two drivers, which is better? Why?