#8. Using the Step-Down Method for this problem. Facilities has a total cost pool of $1,800,000. The cost driver has been determined to square footage. What would be the new allocation rate be for facilities? (Hint: round to the second decimal place) Choice A: $3.358 per square foot Choice B: $4.515 per square foot Choice C: $5.63 per square foot Choice D: $75,000,000 dollars #9. Using the Step-Down Method for this problem. How much would Facilities expense be allocated to the Accounting/Billing Department? (Hint: round to the second decimal place) Choice A: Nothing it is an indirect department Choice B: $75,000 Choice C: $92,000 Choice D: $112,600 #10. Using the Step-Down Method for this problem. After the allocation of Facilities to the Accounting/Billing department what would be the new cost pool for the Accounting / Billing Department? (Hint: round to the second decimal place) Choice A: $2,112,600 Choice B: $3,000,0000 Choice C: $5,000,000 Choice D: $100,000,000,000 (Hint this is not the correct answer) 11. Using the Step-Down Method for this problem. Accounting - Billing has a total cost pool of $2,112,600. The cost driver has been determined to number of procedures. What would the allocation rate be for Accounting/Billings? (Hint: round to the third decimal place) Choice A: $11.31 per procedure Choice B: $1.565 per procedure Choice C: $3.32 per procedure Choice D: $8.00 per procedure #12. Using the Step-Down Method for this problem. Now that you have calculated the new allocation rate for Accounting/Billing (use your choice from #11 this will have to be rounded out to 3 digits). What is the amount of Accounting/Billings related expense that you would allocate to the Routine Care Department? (Hint: round to the second decimal place) Choice A: $260,050 Choice B: $540,300 Choice C: $782,500 Choice D: $1,005,000 #13. Using the Step-Down Method for this problem. What would be the total expense for the Routine Care department (this is the addition of direct department expenses and allocated indirect costs). (Hint: round to the second decimal place) Choice A: $695,750 Choice B: $1,483,000 Choice C: $11,486,250 Choice D: $29,919,780

Using the same numbers as we will calculate using the Step-Down Method. In this example, it has been determined to step-down Facilities expenses to the rest of the support departments and to the direct or patient service areas Department Facilties (support dept) Accounting - Billing (s Total for Support Departments Revenues Expenses Space (square Feet) Number ofProcedures 1,800,000 2,000,000 3,800,000 10,000 20,000 30,000 Routine Care (patient services) Intensive Care (patient services) Diagnostic Services (patient services) Total for Patient Service DepartmentsS Grant Total $ 30,000,000 S S25,000,000 S $ 20,000,000 S 75,000,000 S 75,000,000 S 10,000,000 9,000,000 7,000,000 26,000,000 29,800,000 125,000 100,000 75,000 300,000 330,000 500,000 450,000 400,000 1,350,000 1,350,000 S