Can you please check David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below.| | Square Footage | Direct Expenses | Lab Tests ||-----------------|----------------|-----------------|-----------|| Utilities | | $200,000 | || Administration | 2,000 | 500,000 | || Laboratory | 2,000 | 625,000 | || Day-op suite | 3,000 | 1,400,000 | 4,000 || Cystoscopy | 1,500 | 300,000 | 500 || Endoscopy | 1,500 | 600,000 | 500 || **Total** | **10,000** | **$3,375,000** | **5,000** |*What are the cystoscopy department's total expenses?***Answer:** $529,771

Total expenses include: Direct expenses Lab tests Utility expenseDirect expense for Cystoscopy department =$300,000Lab test =500Total expense for utilities =$200,000Total square footage =10000Per square foot expense for utilities =$200,00010,000=$20 per square footUtilitity expense for 1500 square foot =1500×$20=$30000Computation of total expense for Cystoscopy department is as follows: Total expense =Direct expense+Lab test+Utility expense=$300,000 +$500+$30,000=$330,500