Allocation Direct Method

Part 1 use provided info to complete table using direct method. part 2 use provided data to complete table using step-down method.

10 Revenues: 12 13 Adult Medicine 14 Obstetrics 15 Pediatrics 16 Total revenues $ 12,000,000 6,000,000 2,000,000 $ 20,000,000 17 21 Adult 18 Direct Costs 19 20 Patient Services Departments. Adult Medicine $ 6.000.000 22 Obstetrics 3.600.000 23 Pediatrics 1.200.000 24 Subtotal $ 10.800.000 25 Support Departments 26 Administration 1.000.000 27 Facilities 4 400 000 28 Finance 1.800.000 29 Subtotal $7 200.000 30 Total costs $ 18,000,000 32 location att 33 34 Services Percentage of Services Provided by CASE4 32 Allocation Matrix 33 34 Services Percentage of Services Provided by 35 Provided to Administration Facilities Finance 36 37 Administration 6% 38 Facilities 39 Finance 10% 10% 40 Adult Medicine 55% 41 Obstetrics 2005 10% 2596 42 Pediatriacs 25% 2006 43 Total 100% 100% 100% 10% 48 ALLOCATION CALCULATIONS 44 45 H 1 46 47 48 ALLOCATION CALCULATIONS 49 50 PART 1 51 DIRECT METHOD: Patient Service 52 Adult Medicine Obstetrics Pediatrics Total 53 Administration allocation $ 437,500 $ 1,000,000 54 Facilities allocation 517,647 4,400,000 55 Finance allocation 300,000 1,800,000 56 Total $ 7.200,000 57 58 PART 2 59 STEP-DOWN METHOD Forx, no amount should be entered 60 Administration Facilities Finance Adult Medicine 61 Administration allocation X $ 100,000 $ 100,000 $ 350,000 62 Facilities allocation 473,684 63 Finance allocation 64 Total 65 66 REVIEW PURPOSES ONLY NO WORK REQUIRED 67 DOUBLE APPORTIONMENT METHOD: Obstetrics Pediatrics Patient Service Patient Total Obstetr $ 800,000 4,026,316 2.373,684 $ 7.200,000 X 473.684 X 395,614 X K Patient Service 8 INPUT DATA KEY OUTPUT 10 Revenues 11 Profit and Loss Statements 12 PART 3 (INSERT INFORMATON FROM INPUT DATA AND PARTS 1 AND 2) Direct Method A Medicine Obstetrics Pediatrics Aggregate Revenues $ 12,000,000 $5,000,000 $ 2,000,000 $20,000,000 Direct costs $ 6,000,000 $3,600,000$ 1.200.000 510,800,000 Indirect costs 4,824 200 1.267,507 1.647 820 7739,527 Total costs $ 10,824,200 $4,867.5075 2,847 820 $18.539,527 Pre-tax profit S 1.175,800 $ 1.132 4935 (847820 5 1450.47 Step-Down Method A Medicine Obstetrics Pediatrics Aggregate 13 Adult Medicine $ 12,000,000 14 Obstetrics 6,000,000 15 Pediatrics 2,000,000 16 Total revenues $ 20,000,000 17 18 Direct Costs 19 20 Patient Services Departments 21 Adult Medicine $ 6,000,000 22 Obstetrics 3,600,000 23 Pediatrics 1,200,000 24 Subtotal $ 10,800,000 25 Support Departments 26 Administration 1.000.000 27 Facilities 4,400,000 28 Finance 1.800.000 29 Subtotal $ 7,200,000 30 Total costs $ 18,000,000 31 32 Allocation Matrix. 33 CASE4 Revenues Direct costs Indirect costs Total costs Pre-tax profit $ - - $ $ $ - $ Double Apportionment Method REVIEW PURPOSES ONLY A Medicine Obstetrics Pediatrics Revenues $ 12,000,000 $ 6.000.000 $ 2,000,000 Direct costs $ 6,000,000 $3,600,000 $ 1.200,000 Indirect costs 4,236,594 1,340,336 1,623,070 Aggregate $20,000,000 $10,800,000 7200,000 Ready