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A hospital has the following cost and utilization information
Overhead cost: Maintenance costs: $250,000
Cost centers: Ward: $50,000; Coronary care Unit $100,000
Utilization; Ward treats 100 patients; Coronary care unit treats 50 patients
What is the average cost of the Ward and Coronary care unit, ignoring overhead costs?
If you were to allocate overhead costs to the Ward and the coronary care unit, what share would you allocate to each? Explain.
If the Ward has 2,000 square feet of space and the coronary care unit at 10,000 square feet, calculate average costs for each unit including the appropriate allocation of overhead costs to each.
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