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Whatisthestructure?t are the hospital's expected total costs?17,50o inpatient days?tient days?b. WhaC. What are the hospital'ss estimated total costs at 12,500 inpatient days? Ate average cost per inpatient day at 12,500, 15,000, and 17.500 inpaing Services Department of Ruger Clinic, a multispecialty practicehio, had $100,ooo in direct costs during the year. These costs must beRuger's three revenue-producing patient services departments usingthod. Two cost drivers are under consideration: patient services revrs of housekeeping services used. The patient services departmentstotal of $5 million in revenues during the year. To support these clinical4.4 The HousekeepingToledo, Ohio, hthe directand houenue and hoursrated ae departments used 5,o00 total hours of housekeeping services.activities, thea. What is the value of the cost pool?What is the allocation rateb.if (u) patient services revenue is used as the costdriver and if (2) hours of housekeeping services are used as the cost driver?Refer to problem 4.4. Assume that the three patient services departments are AdultServices, Pediatric Services, and Other Services. The patient services revenue andhours of housekeeping services for each department are as follows:DepartmentAdult ServicesPediatric ServicesOther ServicesTotalRevenue$3,000,000o1,500,000Housekeeping Hours1,5003,000500500,000$5,000,000oОООWhat is the dollar allocation to each patient services department if patia.D. What is the dollar allocation to each patient services department ifc. What is the differernd. Which of the two drivers is better? Why?services revenue is used as the cost driver?housekeeping support are used as the cost driver?tween the two drivers?t is the dollar difference in the amount allocated to each department be

Question

How to solve 4.5 parts a through d? 

 

What
is
thestructure?
t are the hospital's expected total costs?
17,50o inpatient days?
tient days?
b. Wha
C. What are the hospital's
s estimated total costs at 12,500 inpatient days? At
e average cost per inpatient day at 12,500, 15,000, and 17.500 inpa
ing Services Department of Ruger Clinic, a multispecialty practice
hio, had $100,ooo in direct costs during the year. These costs must be
Ruger's three revenue-producing patient services departments using
thod. Two cost drivers are under consideration: patient services rev
rs of housekeeping services used. The patient services departments
total of $5 million in revenues during the year. To support these clinical
4.4 The Housekeeping
Toledo, Ohio, h
the direct
and hou
enue and hours
rated a
e departments used 5,o00 total hours of housekeeping services.
activities, the
a. What is the value of the cost pool?
What is the allocation rate
b.
if (u) patient services revenue is used as the cost
driver and if (2) hours of housekeeping services are used as the cost driver?
Refer to problem 4.4. Assume that the three patient services departments are Adult
Services, Pediatric Services, and Other Services. The patient services revenue and
hours of housekeeping services for each department are as follows:
Department
Adult Services
Pediatric Services
Other Services
Total
Revenue
$3,000,000o
1,500,000
Housekeeping Hours
1,500
3,000
500
500,000
$5,000,000o
ООО
What is the dollar allocation to each patient services department if pati
a.
D. What is the dollar allocation to each patient services department if
c. What is the differern
d. Which of the two drivers is better? Why?
services revenue is used as the cost driver?
housekeeping support are used as the cost driver?
tween the two drivers?
t is th
e dollar difference in the amount allocated to each department be
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What is thestructure? t are the hospital's expected total costs? 17,50o inpatient days? tient days? b. Wha C. What are the hospital's s estimated total costs at 12,500 inpatient days? At e average cost per inpatient day at 12,500, 15,000, and 17.500 inpa ing Services Department of Ruger Clinic, a multispecialty practice hio, had $100,ooo in direct costs during the year. These costs must be Ruger's three revenue-producing patient services departments using thod. Two cost drivers are under consideration: patient services rev rs of housekeeping services used. The patient services departments total of $5 million in revenues during the year. To support these clinical 4.4 The Housekeeping Toledo, Ohio, h the direct and hou enue and hours rated a e departments used 5,o00 total hours of housekeeping services. activities, the a. What is the value of the cost pool? What is the allocation rate b. if (u) patient services revenue is used as the cost driver and if (2) hours of housekeeping services are used as the cost driver? Refer to problem 4.4. Assume that the three patient services departments are Adult Services, Pediatric Services, and Other Services. The patient services revenue and hours of housekeeping services for each department are as follows: Department Adult Services Pediatric Services Other Services Total Revenue $3,000,000o 1,500,000 Housekeeping Hours 1,500 3,000 500 500,000 $5,000,000o ООО What is the dollar allocation to each patient services department if pati a. D. What is the dollar allocation to each patient services department if c. What is the differern d. Which of the two drivers is better? Why? services revenue is used as the cost driver? housekeeping support are used as the cost driver? tween the two drivers? t is th e dollar difference in the amount allocated to each department be

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Step 1

a.

Calculation of Dollar Allocation to each patient services department if patient services revenue is used:

Using a excel spreadsheet the dollar allocation cost is determined. The excel spreadsheet is shown below:

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Step 2

The excel spreadsheet with workings to calculate the dollar allocation if patient services revenue is used is shown below:

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Step 3

b.

Calculation of Dollar Allocation to each patient services department if hours of housekeeping support are used:

Using a excel spreadsheet the dollar allocation cost is deter...

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