Management of Shreveport Community Hospital has decided to allocate the budgeted costs of its three support departments (administration, public relations, and maintenance) to its three operating programs (surgery, in-patient care, and out-patient services). Budgeted information for 2010 follows.

Budgeted costs

Administration .......$5,400,000

Public relations ....... 1,100,000

Maintenance & janitorial .... 1,700,000

Allocation bases

Administration .......Dollars of assets employed

Public relations ......Number of employees

Maintenance & janitorial ...Hours of equipment operation

Using the direct method, allocate the expected support department costs to the operatingareas.

Transcribed Image Text:

EXPECTED UTILIZATIONS Dollars of Assets Employed 1,480,180 900,200 1,651,360 3,948,500 2,458,500 1,043,000 Number of Hours of Employees Equipment Operation Administration Public relations Maintenance & janitorial Surgery In-patient care Out-patient services 14 10 20 36 2,040 940 3,060 24,850 28,400 17,750