You are helping the Finance director of a special project. He is attempting to determine the best method to allocate the Housekeeping department. He has narrowed his choices to two key statistics: 1 - Square Feet or 2 - Hours Spent in Each Clinical Area. Below is the pertinent data you will need to perform the allocation.

Housekeeping Department Total Costs: $250,000

Total Square Feet: 125,000

Total Hours Spent: 12,000

What is the allocation Rate for:

Using Square Feet:

Using Hours:

Allocate to the following Departments based on the provided statistics:

Sq                          Ft                             Hours

Medical Unit          20,000                      2,000

Cath Lab                 15,000                     2,000

Surgery Depart      50,000                   4,000

Radiology                35,000                  3,000

Lab                           5,000                     1,000

Based on your analysis, are there differences? Which method would you choose and why?

Answer rating: 100% (QA)

To calculate the allocation rate we divide the total cost of the Housekeeping department by the rele... View the full answer