David Jones, the new administrator for a surgical clinic, was trying to determine now 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 Lab Tests Expenses $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 10,000 4,000 500 500 5,000
David Jones, the new administrator for a surgical clinic, was trying to determine now 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 Lab Tests Expenses $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 10,000 4,000 500 500 5,000
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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
Lab Tests
Expenses
$200,000
500,000
625,000
1,400,000
300,000
600,000
$3,375,000
Utilities
Administration 2,000
Laboratory
Day-op suite
Cystoscopy
Endoscopy
2,000
3,000
1,500
1,500
10,000
4,000
500
500
Total
5,000
What are the day-op suite's total expenses?
A BI
Ff -
T:
$42, 375,551
ANM
!!!](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F36f3dd43-c2dd-4f90-ba08-6251a98b13b7%2F554d3623-3c48-4282-8003-cdcf3b35b5bc%2Ffb96ioq_processed.jpeg&w=3840&q=75)
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
Lab Tests
Expenses
$200,000
500,000
625,000
1,400,000
300,000
600,000
$3,375,000
Utilities
Administration 2,000
Laboratory
Day-op suite
Cystoscopy
Endoscopy
2,000
3,000
1,500
1,500
10,000
4,000
500
500
Total
5,000
What are the day-op suite's total expenses?
A BI
Ff -
T:
$42, 375,551
ANM
!!!
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