Question: Study Table 61, Table 62, and review the chapter text describing how the indirect cost is allocated. This assignment will change the allocation bases input
Study Table 61, Table 62, and review the chapter text describing how the indirect cost is allocated. This assignment will change the allocation bases input for (A) Number of Visits (Volume), (B) Proportion of Direct Costs, and (C) Number of Computers in Service. Required 1. Compute the costs allocated to cost centers Clerical Salaries, Administrative Salaries, and Computer Services using the new allocation bases shown below. Use worksheet #1 that replicates the set up in Table 62. Total the new results. The new allocation bases are: A 5 # Visits (Volume): PT 5 9,600/OT 5 4,000/ST 5 2,400/Total 5 16,000 (16,000 3 $3.50 5 $56,000) B 5 Proportion of Direct Costs: PT 5 60%/OT 5 25%/ST 5 15%/Total 5 100% (% 3 $55,000) C 5 # Computers in Service: PT 5 10/OT 5 3/ST 5 3/Total 5 16 (16 3 $5,000 each 5 $80,000). 2. Using worksheet #2 that replicates the set up in Table 61, enter the new direct cost and the new totals for indirect costs resulting from your work. Total the new results.
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