odbury Hospital provided the following data for its three service departments and three operating departments. Service Departments Food Administrative Services Services $ 87,000 $ 301,060 $ 249,020 5,000 13,000 otal cost eals served quare feet of space iles processed Housekeeping Services Service Department ousekeeping Services ood Services dministrative Services 800 6,500 Allocation Bases Square feet of space Meals served Files processed Operating Departments Laboratory Radiology $ 405,900 $520,500 2,000 10,000 14,000 1,000 7,500 7,000 General Hospital $ 475,800 68,000 108,000 25,000 e costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the owing table: Total $ 2,039,280 71,800 150,000 46,000
odbury Hospital provided the following data for its three service departments and three operating departments. Service Departments Food Administrative Services Services $ 87,000 $ 301,060 $ 249,020 5,000 13,000 otal cost eals served quare feet of space iles processed Housekeeping Services Service Department ousekeeping Services ood Services dministrative Services 800 6,500 Allocation Bases Square feet of space Meals served Files processed Operating Departments Laboratory Radiology $ 405,900 $520,500 2,000 10,000 14,000 1,000 7,500 7,000 General Hospital $ 475,800 68,000 108,000 25,000 e costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the owing table: Total $ 2,039,280 71,800 150,000 46,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Woodbury Hospital provided the following data for its three service departments and three operating departments.
Total cost
Meals served
Square feet of space.
Files processed
Service Department
Housekeeping Services
Food Services
Administrative Services
Service Departments
Housekeeping Food Administrative
Services
Services
$ 87,000 $ 301,060
Services
$ 249,020
800
6,500
5,000
Departmental costs before allocations
Allocations:
Allocation Bases
Square feet of space
Meals served
Files processed
Housekeeping Services costs
Food Services costs
The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the
following table:
Administrative Services costs
Total costs after allocations
13,000
All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospital's administrator wants the costs of the
three service departments allocated to these three billing centers.
Housekeeping
Services
$
Operating Departments
Required:
Using the step-down method, prepare the cost allocation desired by the hospital administrator. Include under each billing center the
direct costs of the center, as well as the costs allocated from the service departments.
Laboratory Radiology
$ 405,900 $ 520,500
2,000
10,000
1,000
7,500
14,000
7,000
Note: Please enter allocations from a department as negative and allocations to a department as positive. The line should add
across to zero. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
General
Hospital
Food
Services
$ 475,800
68,000
108,000
25,000
Administrative
Services
Total
$ 2,039, 280
71,800
150,000
46,000
Laboratory Radiology
General
Hospital
87,000 $ 301,060 $ 249,020 $ 405,900 $ 520,500 $ 475,800
Expert Solution
Step 1: introduction
| Under the step down method, cost of one serice department is allocated to all department and then cost of second service department | ||||
| is allocated to all department except first service department. It means that no cost is allocated to that service department whose cost is already allocated | ||||
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