GHA $4$ TEMPLATE

This assignment is designed to help you learn how to determine total costs by combining direct and indirect costs for a particular department.

In this GHA, you will be determining the total costs for three departments: $(1)$ Physical Therapy $(2)$ Occupational Therapy and $(3)$ Speech Therapy.

To determine the total costs, you will need to add the direct costs to the indirect costs using the template provided below.

Please use the example provided in the assignment description if you find that you need some support understanding the required calculations.

DIRECT COSTS

The direct costs for each department are easily identifiable, because they are the costs that are directly attributable to the department.

The direct costs are as follows:

Physical Therapy $($PT$)605,000$

Occupational Therapy $($OT$)165,000$

Speech Therapy $($ST$)152,000$

Total Direct Costs $922,000$

INDIRECT COSTS

The indirect costs will need to be allocated to Physical Therapy $($PT$),$ Occupational Therapy $($OT$),$ and Speech Therapy $($ST$).$

The indirect costs in this scenario have been identified as: $(1)$ Clerical Salaries, $(2)$ Administrative Salaries, and $(3)$ Computer Services.

The total indirect costs that need to be allocated to PT$,$ OT$,$ and ST are as follows:

Clerical Salaries $60,000$

Administrative Salaries $75,000$

Computer Services $50,000$

Total Indirect Costs $185,000$

Each type of indirect cost will need to be allocated to each department based on an allocation basis that is appropriate for the particular type of cost$.$

Clerical Salaries will be allocated based on Visit Volume.

Administrative Salaries will be allocated based on the Proportion of Direct Costs

Computer Services will be allocated based on the Number of Computers in Service.

Visit Computers

Volume in Service

Physical Therapy $($PT$)9,6008$

Occupational Therapy $($OT$)4,5004$

Speech Therapy $($ST$)2,4005$

Total $16,50017$

Step $1$: Set$-$up a Table of Direct and Indirect Costs

Direct Cost Indirect Cost Total

Physical Therapy $($PT$)605,000$

Occupational Therapy $($OT$)165,000$

Speech Therapy $($ST$)152,000$

Totals $922,000$