Compute: direct method and step method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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the book I use for study:
Horngren's Cost Accounting: A Managerial Emphasis, 16th edition, Global Edition.
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Compute: direct method and step method

Transcribed Image Text:Mitra Permata Hati Clinic is a non-profit organization, building clinics for children
from underprivileged families. This institution receives donations from the community
and local government for its operations. The local government asked the clinic manager to
make a financial report regarding the funds received from the local government budget.
Available data:
DESCRIPTION
FOH Cost
Square feet
Employees
Operating Department
Medical
Dental
$ 200,000
$80,000
8,000
1,000
5
3
Support Department
Administration
$ 80,000
900
Housekeeping
$ 40,000
100
2
The Administration Department will be allocated based on the number of employees while
the Housekeeping Department will be allocated based on square feet. It is assumed that
the Medical Department treats 12,000 patients and the Dental Department treats 10,000
patients.
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