I need help with question 6.6 chapter 6

I need help with question 6.6 that is in the first picture. The question says that you need to use the allocation system used in question 6.4 with is the same used in question 6.3 that is in the second picture3

o cost driver schemes is better! Explain your em 0. Which of the two answer 25 (Hint: The his problem, is cover Now assume that the cost allocation, wir administration, hou method of cost allocation, reviewed in he step-down method of cost alloc vered in detail in the Chapter 6 Supplement.) hat the hospital uses the step down method for with salary dollars as the cost driver for housekeeping labor hours as the cost driver fee services revenue as the cost driver for financial we also that the general administration department wast services to other support departments, followed ilities department. The financial services department be least services to the other support departments allocation table to allocate the hospital's overhead cost lities, and patient services reven facilities services. Assume also provides the most se sely by the facilities department provides the least a. Use an allocation b. Compare the dollar c Is the direct method the patient services departments, e the dollar allocations with those obtained in Problem 6.4. Explain the differences. direct method or the step-down method better for cost cation within St. Benedict's? Explain your answer. the direct method of cost allocation and use the same cost specified in Problem 6.4 for the general administration facilities departments. However, assume that $2,000,000 of cial services costs is related to billing and managerial reporting $1,000,000 is related to payroll and personnel management 6.6 Return to the direct drivers as specified in Pro activities. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? Chapter 6: Departmental Costing and Cost Alle 6.4. Assume that the hospital for general administra ve that the hospital uses salary dollars as the cost driver ral administration, housekeeping labor hours as the cost for facilities, and patient services revenue as the cost driver nancial services. (The majority of the costs of the facilities nent stem from the provision of housekeeping services 2. What are the appropriate allocation rates? Ise an allocation table similar to the one used for Problem 6.3 to allocate the hospital's overhead costs to the patient services departments. c. Compare the dollar allocations with those obtained in Problem 6.3. Explain the differences. d. Which of the two cost driver schemes is better? Explain your answer. 0.5 (Hint: The step-down method of cost allocation, reviewed in this problem, is covered in detail in the Chapter 6 Supplement.) NOW assume that the hospital uses the step-down method for cost allocation, with salary dollars as the cost an With salary dollars as the cost driver for general ation, housekeeping labor hours as the cost driver for patient services revenue as the cost driver for finar also that the general administration departmer iner to other support departments, follo incial services depa administration, housekeep facilities, and patien services. Assume also that the general his allow ber for Fons. 15BN 9781 00006 6,6 Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for the general administration and facilities departments. However, assume that $2,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. a. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? ices revenue is used as the cost driver? services department a. What is the dollal do patient services revenue is used as the b. What is the dollar allocation to each patient servis hours of housekeeping support is used as the c. What is the difference in the allocation to ca between the two drivers? d. Which of the two drivers is better? Why? pport is used as the cost driver difference in the allocation to each departmen four patient services re as follows: 77xe following data pertain to problems 6.3 through 6.6: St. Benedict's Hospital has three support departments and four patien departments. The direct costs to each of the support departm General Administration $2,000,000 5,000,000 Facilities 3,000,000 Financial Services Selected data for the three support and four patient services departments shown below: Housekeeping Labor Hours Salary Dollars 2,000 $1,500,000 5,000 Patient Space Services (square feet) Revenue Department Support: General 10,000 Administration Facilities 20,000 Financial Services 15,000 Total 45,000 Patient Services: Routine Care $30,000,000 400,000 Intensive Care Diagnostic Services 6,000,000 60,000 Other Services 10,000,000 100,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 3,000 10,000 3,000,000 2,000,000 $6,500,000 150,000 30,000 15,000 25,000 220,000 230.000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cor driver for facilities is space utilization. a. What are the appropriate allocatio b. Use an allocation table similar rate the hospital's overhead costs to the tments JOU ,000,000 -,000,000 ",000,000 2,000,000 6,500,000 66 Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for the general administration and facilities departments. However, assume that $2,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. a. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. location. financial facilities is b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? e the ments herween the two drivers? d. Which of the two drivers is better? Why? patient services e as follows: The following data pertain to problems 0.3 through 0.6: St. Benedict's Hospital has three support departments and four patient se departments. The direct costs to each of the support departments are as follo General Administration $2,000,000 Facilities 5,000,000 Financial Services 3,000,000 Selected data for the three support and four patient services departments are shown below: Patient Services Revenue Space (square feet) Housekeeping Labor Hours Salary Dollars 10,000 2,000 $1,500,000 Department Support: General Administration Facilities Financial Services Total Patient Services: 20,000 15,000 45,000 5,000 3,000 10,000 3,000,000 2,000,000 $ 6,500,000 Routine Care $30,000,000 400,000 Intensive Care 4,000,000 40.000 Diagnostic Services 6,000,000 60,000 Other Services 10,000,000 100,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 150,000 30,000 15,000 25,000 220,000 230,000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver facilities is space utilization a. What are the appropriate b. Use an allocation table sin bit 6.7 to algo hospital's overhead costs to Services de stes? bit 6 o cost driver schemes is better! Explain your em 0. Which of the two answer 25 (Hint: The his problem, is cover Now assume that the cost allocation, wir administration, hou method of cost allocation, reviewed in he step-down method of cost alloc vered in detail in the Chapter 6 Supplement.) hat the hospital uses the step down method for with salary dollars as the cost driver for housekeeping labor hours as the cost driver fee services revenue as the cost driver for financial we also that the general administration department wast services to other support departments, followed ilities department. The financial services department be least services to the other support departments allocation table to allocate the hospital's overhead cost lities, and patient services reven facilities services. Assume also provides the most se sely by the facilities department provides the least a. Use an allocation b. Compare the dollar c Is the direct method the patient services departments, e the dollar allocations with those obtained in Problem 6.4. Explain the differences. direct method or the step-down method better for cost cation within St. Benedict's? Explain your answer. the direct method of cost allocation and use the same cost specified in Problem 6.4 for the general administration facilities departments. However, assume that $2,000,000 of cial services costs is related to billing and managerial reporting $1,000,000 is related to payroll and personnel management 6.6 Return to the direct drivers as specified in Pro activities. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? Chapter 6: Departmental Costing and Cost Alle 6.4. Assume that the hospital for general administra ve that the hospital uses salary dollars as the cost driver ral administration, housekeeping labor hours as the cost for facilities, and patient services revenue as the cost driver nancial services. (The majority of the costs of the facilities nent stem from the provision of housekeeping services 2. What are the appropriate allocation rates? Ise an allocation table similar to the one used for Problem 6.3 to allocate the hospital's overhead costs to the patient services departments. c. Compare the dollar allocations with those obtained in Problem 6.3. Explain the differences. d. Which of the two cost driver schemes is better? Explain your answer. 0.5 (Hint: The step-down method of cost allocation, reviewed in this problem, is covered in detail in the Chapter 6 Supplement.) NOW assume that the hospital uses the step-down method for cost allocation, with salary dollars as the cost an With salary dollars as the cost driver for general ation, housekeeping labor hours as the cost driver for patient services revenue as the cost driver for finar also that the general administration departmer iner to other support departments, follo incial services depa administration, housekeep facilities, and patien services. Assume also that the general his allow ber for Fons. 15BN 9781 00006 6,6 Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for the general administration and facilities departments. However, assume that $2,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. a. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? ices revenue is used as the cost driver? services department a. What is the dollal do patient services revenue is used as the b. What is the dollar allocation to each patient servis hours of housekeeping support is used as the c. What is the difference in the allocation to ca between the two drivers? d. Which of the two drivers is better? Why? pport is used as the cost driver difference in the allocation to each departmen four patient services re as follows: 77xe following data pertain to problems 6.3 through 6.6: St. Benedict's Hospital has three support departments and four patien departments. The direct costs to each of the support departm General Administration $2,000,000 5,000,000 Facilities 3,000,000 Financial Services Selected data for the three support and four patient services departments shown below: Housekeeping Labor Hours Salary Dollars 2,000 $1,500,000 5,000 Patient Space Services (square feet) Revenue Department Support: General 10,000 Administration Facilities 20,000 Financial Services 15,000 Total 45,000 Patient Services: Routine Care $30,000,000 400,000 Intensive Care Diagnostic Services 6,000,000 60,000 Other Services 10,000,000 100,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 3,000 10,000 3,000,000 2,000,000 $6,500,000 150,000 30,000 15,000 25,000 220,000 230.000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cor driver for facilities is space utilization. a. What are the appropriate allocatio b. Use an allocation table similar rate the hospital's overhead costs to the tments JOU ,000,000 -,000,000 ",000,000 2,000,000 6,500,000 66 Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for the general administration and facilities departments. However, assume that $2,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. a. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. location. financial facilities is b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? e the ments herween the two drivers? d. Which of the two drivers is better? Why? patient services e as follows: The following data pertain to problems 0.3 through 0.6: St. Benedict's Hospital has three support departments and four patient se departments. The direct costs to each of the support departments are as follo General Administration $2,000,000 Facilities 5,000,000 Financial Services 3,000,000 Selected data for the three support and four patient services departments are shown below: Patient Services Revenue Space (square feet) Housekeeping Labor Hours Salary Dollars 10,000 2,000 $1,500,000 Department Support: General Administration Facilities Financial Services Total Patient Services: 20,000 15,000 45,000 5,000 3,000 10,000 3,000,000 2,000,000 $ 6,500,000 Routine Care $30,000,000 400,000 Intensive Care 4,000,000 40.000 Diagnostic Services 6,000,000 60,000 Other Services 10,000,000 100,000 Total $50,000,000 600,000 Grand Total $50,000,000 645,000 150,000 30,000 15,000 25,000 220,000 230,000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver facilities is space utilization a. What are the appropriate b. Use an allocation table sin bit 6.7 to algo hospital's overhead costs to Services de stes? bit 6