Toledo Clinic has two patient services departments: Adult Services and Pediatric Services The patient services departments...

 

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Toledo Clinic has two patient services departments: Adult Services and Pediatric Services The patient services departments are supported by General Administration, Facilities, and Financial Services. The General Administration Department of Toledo Clinic has compiled the following information: Department General Administration Facilities Financial Services Adult Services Pediatric Services Direct Costs $700,000 $300,000 $1,000,000 $3,600,000 $4,400,000 Square Feet 4,000 1,000 5,000 42,000 48,000 Salary Dollars $1,200,000 $800,000 $2,000,000 $12,000,000 $8,000,000 Toledo Clinic has determined that the cost driver for General Administration and Financial Services is salary dollars and that the cost driver for Facilities is square feed. Using the step-down method of cost allocation, what is the approximate allocation rate for General Administration costs (round to three decimal places)? Assume General Administration's costs are allocated first, followed by Facilities and then by Financial Services'. Toledo Clinic has two patient services departments: Adult Services and Pediatric Services The patient services departments are supported by General Administration, Facilities, and Financial Services. The General Administration Department of Toledo Clinic has compiled the following information: Department General Administration Facilities Financial Services Adult Services Pediatric Services Direct Costs $700,000 $300,000 $1,000,000 $3,600,000 $4,400,000 Square Feet 4,000 1,000 5,000 42,000 48,000 Salary Dollars $1,200,000 $800,000 $2,000,000 $12,000,000 $8,000,000 Toledo Clinic has determined that the cost driver for General Administration and Financial Services is salary dollars and that the cost driver for Facilities is square feed. Using the step-down method of cost allocation, what is the approximate allocation rate for General Administration costs (round to three decimal places)? Assume General Administration's costs are allocated first, followed by Facilities and then by Financial Services'.

Answer rating: 100% (QA)

To determine the approximate allocation rate for General Administration costs using the stepdown method we need to allocate the costs in a sequential manner Step 1 Allocate General Administration costs Since General Administration costs are allocated first we allocate the entire General Administration cost ... View the full answer