Please answer the following questions based on the table provided:

1. Management of NCI currently allocates the kitchen and cleaning department costs based on the number of residents in each home. Determine the amount of service department costs assigned to each of the homes using this allocation base.(Round percentages to two decimal places in your calculations.)

2. DHFS auditors believe the step method of allocation should be used by first assigning cleaning costs based on square feet and then kitchen costs based on number of residents. Determine the amount of service department costs assigned to each of the homes using this allocation method.(Do not round percentage answers.)

Assignment #6 (Chapter 7) 0 Saved 2 Skipped Nursing Care Inc., or NCI. operates both a small nursing home and retirement home. There is a single kitchen used to provide meals to both the nursing home and retirement home, meaning labor costs and utilities costs ofthe kitchen are shared by the two homes. There is also a centralized cleaning department that provides the cleaning services for both homes as well as the kitchen. The nursing home serves only indigent patients who are on Medicaid. The state Department of Health and Family Services (DHFS) reimburses NCI at Medicaid-approved cost reimbursement rates. The Medicaid reimbursement rates are based on cost information supplied by NCI. The relevant cost and allocation data for the most recent year appear in the following table. Annual Operating Cost cleaning department S 133,809 Central kitchen 3 192,369 | Allocation Base Kitchen Nursing Home Retirement Hone Square feet of space 1,038 2,006 3,086 Number of residents 6 4 | Required: 1. Management of MCI currently allocates the kitchen and cleaning department costs based on the number of residents in each home. Determine the amount of service department costs assigned to each of the homes using this allocation base. (Round percentages to two decimal places in your calculations.) 2. DHFS auditors believe the step method of allocation should be used by rst assigning cleaning costs based on square feet and then kitchen costs based on number of residents. Determine the amount of service department costs assigned to each of the homes using this allocation method. (Do not round percentage answers.) '_l_ll- _l_l s o