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avid Jones, the new adm. locate his indirect expen ercentage of revenues w. potage of each departme- ests, Use the information

avid Jones, the new adm. locate his indirect expen ercentage of revenues w. potage of each departme- ests, Use the information

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Lab Tests Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 4,000 500 500 10,000 5,000 $12500 What are the day-op suite's total expenses?
Transcribed Image Text: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 $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Lab Tests Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 4,000 500 500 10,000 5,000 $12500 What are the day-op suite's total expenses?
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