Reference no: EM132011735

Department Patient Services Revenue Space (square feet) Housekeeping hours Salary dollars Support: General Administration 10,000 2,000 $1,500,000 Facilities 20,000 5,000 $3,000,000 Financial Services 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 3. Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. a. What are the appropriate allocation rates? b. Use an allocation table to allocate the hospital.