David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer problems 3, 4 and 5.

 

3. What are the Day Op Suite’s total expenses?

4. What are the Cystoscopy Department’s total expenses?

5. What are the Endoscopy Department’s total expenses?

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Direct Lab tests Square Footage Expenses Utilities Administration Laboratory Day-op Suite Cystoscopy Endoscopy Total S 200,000 2,000 S 500,000 2,000 S 625,000 3,000 S 1,400,000 1,500 S 300,000 1,500 S 600,000 10.000 3.625.000 4.000 500 500 5,000