### Cost Allocation Exercise: Behrend ClinicBehrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics.Below is a table detailing the service and operating department costs, employee hours, and space occupied:| | Service Department | Operating Department ||-----------------------------|--------------------------|-----------------------|| | Personnel | Support | Prenatal | Pediatrics || Departmental costs | $29,200 | $55,040 | $242,050 | $423,200 || Employee hours | 5,000 | 1,000 | 26,000 | 14,000 || Space occupied (sq. feet) | 3,000 | 2,000 | 35,000 | 8,000 |#### Allocation Basis- **Personnel Department costs** are allocated based on employee hours.- **Support Department costs** are allocated based on space occupied, measured in square feet.The goal is to determine the new total Pediatrics Department cost after the allocations of service department costs. #### Multiple Choice QuestionAfter performing the allocation calculations, the total Pediatrics Department cost is closest to:- $441,260- $443,660- $433,440- $444,471This exercise helps understand cost allocation techniques, specifically using the direct method, and reinforces the practicality of distributing overhead costs in a multi-department organization.

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Description: ### Cost Allocation Exercise: Behrend ClinicBehrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal a

There are two types of departments in the business. One is operating departments and other is…

Business

Accounting

Behrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics. Operating Department Prenatal $ 242,050 $ 423,200 26,000 Service Department Personnel Support Pediatrics $ 29,200 $ 55,040 Departmental costs Employee hours Space occupied 5,000 3,000 1,000 2,000 14,000 35,000 8,000 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to: Multiple Choice $441,260 $443,660

Behrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics. Operating Department Prenatal $ 242,050 $ 423,200 26,000 Service Department Personnel Support Pediatrics $ 29,200 $ 55,040 Departmental costs Employee hours Space occupied 5,000 3,000 1,000 2,000 14,000 35,000 8,000 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to: Multiple Choice $441,260 $443,660

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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