TASK A. Problem Solving. Analyze the given problem and perform the required tasks in the worksheet provided. 1. A hospital has P250,000 expected utility bill this year. The janitorial, accounting, and orderlies departments are service departments servicing the operating, hospital rooms, and laboratories departments. Floor spaces assigned to each department are as follows Department Square Footage Janitorial Accounting 1,000 2,000

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
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Chapter4: Activity-based Costing
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TASK A. Problem Solving. Analyze the given problem and perform the required tasks in
the worksheet provided.
1. A hospital has P250,000 expected utility bill this year. The janitorial, accounting, and
orderlies departments are service departments servicing the operating, hospital rooms,
and laboratories departments. Floor spaces assigned to each department are as follows
Department
Square Footage
Janitorial
Accounting
Orderlies
1,000
2,000
7,000
Operating
Hospital rooms
Laboratories
4,000
30,000
6,000
How much of the P200,000 will eventually become the hospital rooms department's total
costs, assuming a direct allocation based in square footage is used?
2. The Laptop complex, which offers two main services: 1) time on a time-shared computer
and (2) propriety computer programs. Computer time is provided by the Operating
Department (OD), and programs are written by the programming Department(PD).
Usually, the Operating Department spends P 9,000 and the Programming Departmemnt
spends P5,000. The percentage of each services used by each department for the year
2020 is presented below.
PD
OD
User
OD
35%
40%
60 %
PD
65%
Sold to Customers
a. Under the step method, what is the cost of the computer time and the computer
program for sale?
b. Under the reciprocal method, what is the solution to the service cost allocations
problem?
Transcribed Image Text:TASK A. Problem Solving. Analyze the given problem and perform the required tasks in the worksheet provided. 1. A hospital has P250,000 expected utility bill this year. The janitorial, accounting, and orderlies departments are service departments servicing the operating, hospital rooms, and laboratories departments. Floor spaces assigned to each department are as follows Department Square Footage Janitorial Accounting Orderlies 1,000 2,000 7,000 Operating Hospital rooms Laboratories 4,000 30,000 6,000 How much of the P200,000 will eventually become the hospital rooms department's total costs, assuming a direct allocation based in square footage is used? 2. The Laptop complex, which offers two main services: 1) time on a time-shared computer and (2) propriety computer programs. Computer time is provided by the Operating Department (OD), and programs are written by the programming Department(PD). Usually, the Operating Department spends P 9,000 and the Programming Departmemnt spends P5,000. The percentage of each services used by each department for the year 2020 is presented below. PD OD User OD 35% 40% 60 % PD 65% Sold to Customers a. Under the step method, what is the cost of the computer time and the computer program for sale? b. Under the reciprocal method, what is the solution to the service cost allocations problem?
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