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
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- A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950A 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: Maintenance Costs are allocated based on square foot assigned to the Food Service Costs are allocated based on number of meals served to the 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 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.Management of Seattle Community Hospital has decided to allocate its three support departments (administration, public relations, and maintenance) to its three operating departments (surgery, in-patient, and out-patient). Budgeted information for the year follows: Direct costs administration $5,400,000 public relations 1,100,000 maintenace and janitorial 1,700,000 Surgery 9,000,000 In-patient 12,000,000 outpatient services 8,000,000 allocation Bases Administration Dollars of assets employed public relations Number of employees maintnance and Janitorial Hours of equipment operation Expected Utilizations Assets Employed Number of Employees Hours of Equipment Operation Administration $1,500,000 20 2,000 Public Relations 900,000 10 1,000 Maintenance and Janitorial 1,600,000 75 3,000 Surgery 4,000,000 20 25,000 In-patient care 2,500,000…
- Part (two). The following information relates to the wards in the cardiology department of Good Health Hospital for one accounting period Wards 1 2 3 Number of Beds 12 10 20 Total number of Patients 48 32 108 Total ward staff (excluding consultants) 8 8 12 Ward staff – full-time equivalent 5 4 6 Variable operating costs for period £58,000 £66,000 £98,000 Operating fixed costs £85,000 £67,000 £88,000 General overhead costs £40,000 £40,000 £40,000 General overhead costs are made up of recharges from support services. The total cost of £120,000 is split equally between the three wards. The hospital manager is concerned about the high costs of running the three heart-care wards. She has asked you to investigate their performance. Question Write a report which investigates the costs of operating the three hospital wards. Your report should include appropriate measures of performance for each ward and you…The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital's four patient service departments utilize the following amounts of space:Department A = 1,000 square feetDepartment B = 2,000 square feetDepartment C = 3,000 square feetDepartment D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to each department? Show all work. ....typing onlyThe Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital’s four patient service departments utilize the following amounts of space: Department A = 1,000 square feet Department B = 2,000 square feet Department C = 3,000 square feet Department D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department A?
- Yellville Regional Hospital is a small hospital with two service departments and three revenue areas: Service Department Direct Costs Square Feet Laundry Pounds Housekeeping (HK) $ 80,000 - 16,000 Laundry $ 132,000 500 - Revenue Areas: Surgery $ 400,000 1,500 48,000 Semiprivate rooms $ 200,000 2,000 24,000 Maternity $ 150,000 1,000 12,000 The hospital wants to allocate the service department costs to the revenue areas. Housekeeping is allocated based on square footage; Laundry is allocated based on pounds of laundry. The normal capacity for Surgery is 200 hours per month; normal capacity for semiprivate rooms is 600 patient days; and normal capacity for maternity is 200 patient days.Required:Determine the overhead rate for the three revenue areas. Allocate the service department costs to the revenue…Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller hascompiled the following data for the year just ended. Department Annual CostAdmissions ................................................................................................... $ 90,000Registrar ............................................................................................................ 150,000Computer Services ......................................................................................... 320,000 Division Budgeted Budgeted Planned Courses Enrollment Credit Hours Requiring Computer WorkLiberal Arts .............…Draw a graph of the cost behavior for each of the following costs incurred by the Mountain Summit Hospital. The hospital measures monthly activity in patient days. Label both axes and the cost line in each graph.1. The cost of food varies in proportion to the number of patient days of activity. In January, the hospital provided 3,000 patient days of care, and food costs amounted to $24,000.2. The cost of salaries and fringe benefits for the administrative staff totals $12,000 per month.3. The hospital’s laboratory costs include two components: (a) $40,000 per month for compensation of personnel and depreciation on equipment and (b) $10 per patient day for chemicals and other materials used in performing the tests.4. The cost of utilities depends on how many wards the hospital needs to use during a particular month. During months with activity under 2,000 patient days of care, two wards are used, resulting in utility costs of $10,000. During months with greater than 2,000 patient days…
- The pharmacy in a busy hospital uses pre-determined rates for absorbing total overheads, based on the budgeted number of prescriptions to be handled. A rate of $7 per prescription has been calculated, and the following overhead expenditures have been estimated at two activity levels. Total overheads Number of prescriptions $ 97,000 13,000 109,000 16,000 During a particular period fixed overheads were $45,000. Based on the data above, what was the budgeted level of activity in prescriptions to be handled during the period in question? A 13,000 B 15,000 C 16,000 D 33,3332. The administrator of ABC Hospital would like to know the relationship between the costs of admitting in relation to the number of patients being admitted and determine the cost formula. The following are the related data for the past five months that will be used determine such cost formula.Month | # of Patients Admitted |Admitting CostsJanuary 1,800 P 14,700February 1,900 P 15,200March 1,700 P 13,700April 1,600 P 14,000May 1,500 P 14,300The controller suggested to use the high-low method approach to derive for the cost formula. If the controller’s suggestion is to be followed:How much would be the total fixed costs?Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House-keeping Revenues $ 927,000 $ 267,000 $ 402,000 $ 258,000 Variable expenses 465,000 114,000 195,000 156,000 Contribution margin 462,000 153,000 207,000 102,000 Fixed expenses: Depreciation 68,800 8,100 40,400 20,300 Liability insurance 43,200 20,200 7,600 15,400 Program administrators’ salaries 115,400 40,900 38,100 36,400 General administrative overhead* 185,400 53,400 80,400 51,600 Total fixed expenses 412,800 122,600 166,500 123,700 Net operating income (loss) $ 49,200 $ 30,400 $ 40,500 $ (21,700) *Allocated on the basis of…