(Direct method) Management of Shreveport Community Hospital has decided to allocate the budgeted costs of its three support departments (administration, public relations, and maintenance) to its three operating programs (surgery, in patient care, and out patient services). Budgeted information for 2010 follows.
|
Budgeted costs |
|
|
Administration |
$5,400,000 |
|
Public relations |
1,100,000 |
|
Maintenance & janitorial |
1,700,000 |
|
Allocation bases |
|
|
Administration |
Dollars of assets employed |
|
Public relations |
Number of employees |
|
Maintenance & janitorial |
Hours of equipment operation |
|
EXPECTED UTILIZATIONS |
|||
|
Dollars of Assets |
Number of |
Hours of |
|
|
Employed |
Employees |
Equipment Operation |
|
|
Administration |
1,480,180 |
8 |
2,040 |
|
Public relations |
900,200 |
14 |
940 |
|
Maintenance & janitorial |
1,651,360 |
10 |
3,060 |
|
Surgery |
3,948,500 |
20 |
24,850 |
|
In patient care |
2,458,500 |
36 |
28,400 |
|
Out patient services |
1,043,000 |
44 |
17,750 |
Using the direct method, allocate the expected support department costs to the operating areas.