Refer to the data for Riverside Clinic given in Exhibits (a) and (b). a. b. Required: Use
Question:
a.
b.
Required:
Use the reciprocal-services method in combination with the dual-allocation approach to allocate Riversides service department costs. You will need to apply the reciprocal-services method twice, first, allocate the three service departments variable costs using the short-run usage proportions in Exhibit (a) (panel A). Second, allocate the three service departments fixed costs using the long-run average usage proportions in Exhibit (b). Finally, add the variable costs and fixed costs allocated to each direct-patient-caredepartment.
Transcribed Image Text:
A. Percentage of Service Output Consumed by Using Departments Provider of Service Patient Records Resources and Accounting Human Administration User of Service Patient Records.... 5% Service departmerits Human Resouros 5% Administration and Accounting Orthopedics 20% 359 60% 30% Direct-patient-care O departments 7096 50% ", " B. Allocation Bases Allocation Base Service Department Patient Records.... Human Resources... Administration and Accounting .. Annual patient loac Number of employees Size of department (measured in square ....N feet of space) C. Service Department Costs VariableCost Service Department Cost Be Allocated $24,000 76,000 15,000 47,500 $86,500 $263,500 $100,000 60,000 190,000 $350,000 Human Resources Administration and Accounting Total... 45,000 142,500 Provider of Service Patient Records Resources and Accounting Human Administration User of Service Patient Records Human Resources Administration and Accounting Orthopedics. 10% 10% 10% Direct-patient-care departments 40% 60% 20% 60% 45% 45% Internal Medicine
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1 Variable costs Notation R denotes the total variable cost of Patient Records H denotes the total variable cost of Human Resources A denotes the tota...View the full answer
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