Pleasant View Hospital has three service departments-Food Services, Administrative Services, and X-ray Services. The costs of...
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Pleasant View Hospital has three service departments-Food Services, Administrative Services, and X-ray Services. The costs of these departments are allocated by the step-down method, using the allocation bases and in the order shown below: Service Department Food Services........ Administrative Services. Costs Incurred Variable Meals served Fixed Base for Allocation Peak-period needs Variable Files processed Fixed 10% X-ray Services, 20% Outpatient Clinic, 30% OB Care, and 40% General Hospital Variable X-rays taken X-ray Services........ Fixed Peak-period needs excel Estimated cost and operating data for all departments in the hospital for the forthcoming month are presented in the following table: Varlable costs. Fixed costs. Total costs.. Meals served. Percent of peak-period Food Services needs. Files processed.. X-rays taken. Food Admin. X-Ray Outpatient Services Services Services Clinic CB Care General Hospital Total $ 73,150 $6,800 $98,100 48,000 33,040 59,520 $121,150 $39,840 $97,620 $11,700 26,958 $38,658 $14,850 $53,400 $199,000 99,738 344,744 612,000 $114,588 $398,144 $810,000 1,000 500 7,000 20,000 38,500 2% 1% 17% 80% 100% 1,500 3,000 900 12,000 17,400 1,200 350 8,400 9,950 13% 3% 84% 100% Percent of peak-period X-ray Services needs. All billing in the hospital is done through the Outpatient Clinic, OB Care, or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers. Required: Prepare the cost allocation desired by the hospital administrator. Include under each billing center the direct costs of the center as well as the costs allocated from the service departments. Pleasant View Hospital has three service departments-Food Services, Administrative Services, and X-ray Services. The costs of these departments are allocated by the step-down method, using the allocation bases and in the order shown below: Service Department Food Services........ Administrative Services. Costs Incurred Variable Meals served Fixed Base for Allocation Peak-period needs Variable Files processed Fixed 10% X-ray Services, 20% Outpatient Clinic, 30% OB Care, and 40% General Hospital Variable X-rays taken X-ray Services........ Fixed Peak-period needs excel Estimated cost and operating data for all departments in the hospital for the forthcoming month are presented in the following table: Varlable costs. Fixed costs. Total costs.. Meals served. Percent of peak-period Food Services needs. Files processed.. X-rays taken. Food Admin. X-Ray Outpatient Services Services Services Clinic CB Care General Hospital Total $ 73,150 $6,800 $98,100 48,000 33,040 59,520 $121,150 $39,840 $97,620 $11,700 26,958 $38,658 $14,850 $53,400 $199,000 99,738 344,744 612,000 $114,588 $398,144 $810,000 1,000 500 7,000 20,000 38,500 2% 1% 17% 80% 100% 1,500 3,000 900 12,000 17,400 1,200 350 8,400 9,950 13% 3% 84% 100% Percent of peak-period X-ray Services needs. All billing in the hospital is done through the Outpatient Clinic, OB Care, or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers. Required: Prepare the cost allocation desired by the hospital administrator. Include under each billing center the direct costs of the center as well as the costs allocated from the service departments.
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