Question: need help with 6.6... 6.4 is shown above for reference overhead costs to the patient services departments. 6.4 Assume that the hospital uses salary dollars
overhead costs to the patient services departments. 6.4 Assume that the hospital uses salary dollars as the cost driver for general administration, housekeeping labor hours as the cost driver for facilities, and patient services revenue as the cost driver for financial services. (The majority of the costs of the facilities department stem from the provision of housekeeping services.) a. What are the appropriate allocation rates? b. Use an allocation table similar to the one used for Problem 6.3 to allo cate 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. While answer LION W... DC.CICE - you disc. 6.6 Return to the direct method of cost allocation and use the same cost driv- ers as specified in Problem 6.4 for the general administration and facili- ties departments. However, assume that $2,000,000 of financial services costs are related to billing and managerial reporting and $1,000,000 are 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 complet- ing Part A c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs
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