The management of Santa Fe Community Hospital (SFCH) has decided to allocate the budgeted costs of its three service departments (Administration, Public Relations, and Maintenance) to its three revenue producing programs (Surgery, In Patient Care, and Out Patient Services). Budgeted information for 2000 follows:
|
Budgeted costs: |
|
|
Administration |
$2,000,000 |
|
Public Relations |
700,000 |
|
Maintenance |
500,000 |
|
Allocation bases: |
|
|
Administration |
Dollars of assets employed |
|
Public Relations |
Number of employees |
|
Maintenance |
Hours of equipment operation |
|
EXPECTED UTILIZATIONS |
|||
|
Dollars of Assets |
Number of |
Hours of |
|
|
Employed |
Employees |
Equipment Operation |
|
|
Administration |
$740,090 |
4 |
1,020 |
|
Public Relations |
450,100 |
7 |
470 |
|
Maintenance |
825,680 |
5 |
1,530 |
|
Surgery |
1,974,250 |
10 |
12,425 |
|
In Patient Care |
1,229,250 |
18 |
8,875 |
|
Out Patient Services |
521,500 |
22 |
14,200 |
Using the direct method, allocate the expected service department costs to the revenue producing areas.