6.2 Refer to Problem 6.1. 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 Revenue Housekeeping Hours Adult Services $3,000,000 1,500 Pediatric Services 1,500,000 3,000 Other Services 500,000 Total $5,000,000 500 5,000 a. What is the dollar allocation to each patient services department if patient services revenue is used as the cost driver? b. What is the dollar allocation to each patient services department if hours of housekeeping support is used as the cost driver? c. What is the difference in the allocation to each department. between the two drivers? d. Which of the two drivers is better? Why?
6.2 Refer to Problem 6.1. 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 Revenue Housekeeping Hours Adult Services $3,000,000 1,500 Pediatric Services 1,500,000 3,000 Other Services 500,000 Total $5,000,000 500 5,000 a. What is the dollar allocation to each patient services department if patient services revenue is used as the cost driver? b. What is the dollar allocation to each patient services department if hours of housekeeping support is used as the cost driver? c. What is the difference in the allocation to each department. between the two drivers? d. Which of the two drivers is better? Why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:6.2 Refer to Problem 6.1. 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
Revenue
Housekeeping Hours
Adult Services
$3,000,000
1,500
Pediatric Services
1,500,000
3,000
Other Services
500,000
Total
$5,000,000
500
5,000
a. What is the dollar allocation to each patient services department if
patient services revenue is used as the cost driver?
b. What is the dollar allocation to each patient services department if
hours of housekeeping support is used as the cost driver?
c. What is the difference in the allocation to each department.
between the two drivers?
d. Which of the two drivers is better? Why?
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