Problem 6.4. Please don't worry about part C. Just a., b., and d. I added the picture for 6.3 just in case you needed that one as well.

nt if nt if The following data tain to problems 6.3 thronul o 6: per St. Benedict's Hospital has three support departments and four each of the support departments are as follouv departments. The direct costs to $2,000,000 General Administration 5,000,000 Facilities Financial Services 3,000,000 selected data for the three support and four patient services departments shown below: Patient (square Housekeeping Revenue feet) Labor Hours Dollars Support: 2,000 1,500,000 10,000 General Administration 3,000,000 20,000 5,000 Facilities 2,000,000 15,000 3,000 Financial Services 10,000 6,500,000 45,000 Total Patient Services Routine care $30,000,000 400,000 150,000 s12,000,000 5,000,000 4,000,000 40,000 30,000 Intensive Care Diagnostic Services 6,000,000 60,000 15,000 6,000,000 7,000,000 Other Services 10,000,000 100,000 25,000 $50,000,000 600,000 220,000 $30,000,000 Total Grand Total $50,000,000 645,000 230,000 S36,500,000 ition 64 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 allocate the hospital's overhead costs to the patient services departments c Compare the dollar allocations with those obtained in Problem 3. Explain the differences Explain your d Which of the two cost driver schemes is better answer. 227