Using Activity Based Costing, net income in the outpatient division improves by? Citizen's Hospital runs a small

  Using Activity Based Costing, net income in the outpatient division improves by?

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Citizen's Hospital runs a small hospital and several outpatient clinics. The hospital has three major support areas whose expenses have been traditionally allocated to program areas based on direct services hours. The Director of Outpatient Services has been told his division is losing $192,500, even though the entire hospital system (inpatient and outpatient) is making $230,000. The Outpatient Director has asked the hospital to investigate the impact of activity based costing on the allocation of the following costs using the statistics below: Cost Statistic Inpatient Outpatient Accounting Cost Accounting & Admin Billing & collections Facilities Total Statistic $3,000,000 1,500,000 270,000 $4,770,000 Inpatient Direct Hours E Bills Square Feet Outpatient 450,000 330,000 260,000 150,000 30,000 10,000 Using Activity Based Costing, net income in the outpatient division improves by: Citizen's Hospital runs a small hospital and several outpatient clinics. The hospital has three major support areas whose expenses have been traditionally allocated to program areas based on direct services hours. The Director of Outpatient Services has been told his division is losing $192,500, even though the entire hospital system (inpatient and outpatient) is making $230,000. The Outpatient Director has asked the hospital to investigate the impact of activity based costing on the allocation of Citizen's Hospital runs a small hospital and several outpatient clinics. The hospital has three major support areas whose expenses have been traditionally allocated to program areas based on direct services hours. The Director of Outpatient Services has been told his division is losing $192,500, even though the entire hospital system (inpatient and outpatient) is making $230,000. The Outpatient Director has asked the hospital to investigate the impact of activity based costing on the allocation of the following costs using the statistics below: Cost Statistic Inpatient Outpatient Accounting Cost Accounting & Admin Billing & collections Facilities Total Statistic $3,000,000 1,500,000 270,000 $4,770,000 Inpatient Direct Hours E Bills Square Feet Outpatient 450,000 330,000 260,000 150,000 30,000 10,000 Using Activity Based Costing, net income in the outpatient division improves by: Citizen's Hospital runs a small hospital and several outpatient clinics. The hospital has three major support areas whose expenses have been traditionally allocated to program areas based on direct services hours. The Director of Outpatient Services has been told his division is losing $192,500, even though the entire hospital system (inpatient and outpatient) is making $230,000. The Outpatient Director has asked the hospital to investigate the impact of activity based costing on the allocation of

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