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    PROBLEM SOLVING (4 Items X 5 Points) : Expected Utilization Rates

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    SnapShop by AJ
    This document provides information about allocating costs from maintenance and food service departments to three patient care units (general medicine, OB, and surgery) at a community hospital. It gives the total costs to be allocated for each service department and describes the allocation methods. The document asks to allocate the costs using four different allocation methods: direct method, step method allocating maintenance first, step method allocating food services first, and the reciprocal method. Solutions are provided for the first three methods.

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    PROBLEM SOLVING (4 Items X 5 Points) : Expected Utilization Rates

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    SnapShop by AJ
    115 views3 pages
    This document provides information about allocating costs from maintenance and food service departments to three patient care units (general medicine, OB, and surgery) at a community hospital. It gives the total costs to be allocated for each service department and describes the allocation methods. The document asks to allocate the costs using four different allocation methods: direct method, step method allocating maintenance first, step method allocating food services first, and the reciprocal method. Solutions are provided for the first three methods.

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    05Activity1 CAC

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    This document provides information about allocating costs from maintenance and food service departments to three patient care units (general medicine, OB, and surgery) at a community hospital. It gives the total costs to be allocated for each service department and describes the allocation methods. The document asks to allocate the costs using four different allocation methods: direct method, step method allocating maintenance first, step method allocating food services first, and the reciprocal method. Solutions are provided for the first three methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    115 views3 pages

    PROBLEM SOLVING (4 Items X 5 Points) : Expected Utilization Rates

    Uploaded by

    SnapShop by AJ
    This document provides information about allocating costs from maintenance and food service departments to three patient care units (general medicine, OB, and surgery) at a community hospital. It gives the total costs to be allocated for each service department and describes the allocation methods. The document asks to allocate the costs using four different allocation methods: direct method, step method allocating maintenance first, step method allocating food services first, and the reciprocal method. Solutions are provided for the first three methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    BM1701

    PROBLEM SOLVING (4 items X 5 points)


    Perform what is being asked. Write your answers on the spaces provided.

    A Community Hospital has two (2) service departments: Maintenance and Food Services. The hospital has three (3)
    patient care units, namely: General Medicine, OB, and Surgery.

    Additional information are as follows:

     Amount of cost to be allocated:

    Maintenance P 8,000,000
    Food Services P 3,000,000

     Allocation method:
    a) Maintenance Costs are allocated based on square foot assigned to the unit.
    b) Food Service Costs are allocated based on number of meals served to the unit.

    EXPECTED UTILIZATION RATES


    SQ. FT. Meals Served
    Food Services 10,000 30,000
    Maintenance 10,000 10,000
    Surgery 20,000 40,000
    OB 30,000 30,000
    General Medicine 30,000 90,000
    TOTAL 100,000 200,000

    1. Using the information, allocate the costs of the two (2) service departments with the three (3) patient care units using:
    Direct Method, Step Method – Maintenance First, Step Method – Food Services First, and Reciprocal Method.

    05 Activity 1 *Property of STI


    Page 1 of 2
    DIRECT METHOD
    ALLOCATED MAINTENANCE COSTS ALLOCATED FOOD SERVICE COSTS
    Food Services 800,000 450,000
    Maintenance 800,000 150,000
    Surgery 1,600,000 600,000
    OB 2,400,000 450,000
    General Medicine 2,400,000 1,350,000

    STEP METHOD – MAINTENANCE FIRST


    ALLOCATED MAINTENANCE COSTS ALLOCATED FOOD SERVICE COSTS
    Food Services 888,888.89
    Maintenance 8,000,000
    Surgery 1,777,777.78 972,222.22
    OB 2,666,666.67 1,458,333.33
    General Medicine 2,666,666.67 1,458,333.33

    STEP METHOD – FOOD SERVICES FIRST


    ALLOCATED MAINTENANCE COSTS ALLOCATED FOOD SERVICE COSTS
    Food Services
    Maintenance 176,470.59
    Surgery 705,882.35 2,044,117.65
    OB 529,411.76 1,533,088.24
    General Medicine 1,588,235.29 4,599,264.71
    ALGEBRAIC METHOD

    M = 8,000 + .10
    M = 8,000,000 + 300,000 + 1%
    M = 8,300,000 + 1%
    M = 8,383,000

    F = 3,000,000 + .10

    F = 3,000,000 + .10 (8,383,000)


    F = 3,000,000 + 838,300
    F = 3,838,300

    Rubric for scoring:


    Criteria Points
    Complete solution and correct answer 5
    Minimal miscalculation; correct answer 1-4
    No answer 0

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