LabAid Ltd provides radiological services. Despite the variety of patients seen at LabAid, the radiological services...

 

Transcribed Image Text:

LabAid Ltd provides radiological services. Despite the variety of patients seen at LabAid, the radiological services involve only two operating departments (Daily Patient and Radiology) and two service departments (Administrative Services and Maintenance Services). For the first quarter of 2022, LabAid incurs the following costs in its four departments: Supplied Department Daily Patient Radiology Administrative Services Maintenance Services The actual level of support relationships among the four departments for the first quarter of 2022 was: by Administrative Services Maintenance Services Overhead costs £350,000 £300,000 £50,000 £55,000 Administrative Maintenance Services Services 25% 10% Used by Daily Patient Radiology 40% 35% 30% The Administrative Services support percentages are based on number of employees. The Maintenance Services support percentages are based on total labour hours. 60% Required: a) Allocate the service department costs to the two operating departments using the direct method. b) Allocate the service department costs to the two operating departments using (i) the step-down method (Allocate Administrative Services first) (ii) the step-down method (Allocate Maintenance Services first) LabAid Ltd provides radiological services. Despite the variety of patients seen at LabAid, the radiological services involve only two operating departments (Daily Patient and Radiology) and two service departments (Administrative Services and Maintenance Services). For the first quarter of 2022, LabAid incurs the following costs in its four departments: Supplied Department Daily Patient Radiology Administrative Services Maintenance Services The actual level of support relationships among the four departments for the first quarter of 2022 was: by Administrative Services Maintenance Services Overhead costs £350,000 £300,000 £50,000 £55,000 Administrative Maintenance Services Services 25% 10% Used by Daily Patient Radiology 40% 35% 30% The Administrative Services support percentages are based on number of employees. The Maintenance Services support percentages are based on total labour hours. 60% Required: a) Allocate the service department costs to the two operating departments using the direct method. b) Allocate the service department costs to the two operating departments using (i) the step-down method (Allocate Administrative Services first) (ii) the step-down method (Allocate Maintenance Services first)

Answer rating: 100% (QA)

a Direct Method Administrative Services Daily Patient 25 x 50000 12500 Radiology 40 x 50000 20000 Maintenance Services Daily Patient 30 x 55000 16500 ... View the full answer