AP Case part A2 (2) (Protected View)-Word ed to edit, Es safer to stay in Peotec

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AP Case part A2 (2) (Protected View)-Word ed to edit, Es safer to stay in Peotected View Enable Editing Case Part A, 2 Next, make the allocation on the basis of the following data. Exhibit 3 shows data for square feet, housckeeping labor hours and salaries for each of the three production departments. First calculate an allocation rate (show your work), then allocate costs and calculate profit (including direct costs) for each of the production departments Cost drivers and total cost pool for each support department is listed below Cost Pool Total utilization Department --(TotalCosts1 Financial Services Cost Dr ver Patient Revenue 1,500,000) 80,000,000 Facilities 3,800,000 Square Feet 300,600 Housekeeping1,600,000 Labor Hours 1,000 Administration 4,400,000 Sy Dollars 10,183,000 Personnel 2550000 Salary Dollars 10,183,000 Read Appendix B to Chapter 12 before attempting this problem. See especially page 573 574. Also see the video for this part of the case. Prepare a schedule illustrating the allocation costs to each of the production departments and calculate the total costs (allocated support department costs + diarect costs) and the net income of each production department after all costs have been allocated

Explanation / Answer

Allocation of cost and Net income statement

Calculation of unit rate per cost driver Departments Cost Pool Cost Driver Total Utilization Rate/cost driver Financial Services 1,500,000 Patient Revenue 80,000,000 0.01875 Facilities 3,800,000 Square Feet 300,600 12.6414 Housekeeping 1,600,000 Labor Hours 91,000 17.5824 Administration 4,400,000 Salary Dollars 10,183,000 0.4321 Personnel 2,550,000 Salary Dollars 10,183,000 0.2504

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