The California Community Hospital has two service departments, Cafeteria and Housekeeping, and two operating departments, Surgery and Outpatient. The hospital uses the direct method to allocate service department costs to operating departments. It allocates Cafeteria costs based on the number of employees. Departmental costs before allocation Number of employees Cafeteria $40,000 20,000 $6,316 $8,000 $30,000 $10,000 Housekeeping Surgery $10,000 $140,000 15,000 15,000 Knowledge Check 01 How much Cafeteria cost should be allocated to the Surgery department? Outpatient $360,000 45,000 Total $550,000
The California Community Hospital has two service departments, Cafeteria and Housekeeping, and two operating departments, Surgery and Outpatient. The hospital uses the direct method to allocate service department costs to operating departments. It allocates Cafeteria costs based on the number of employees. Departmental costs before allocation Number of employees Cafeteria $40,000 20,000 $6,316 $8,000 $30,000 $10,000 Housekeeping Surgery $10,000 $140,000 15,000 15,000 Knowledge Check 01 How much Cafeteria cost should be allocated to the Surgery department? Outpatient $360,000 45,000 Total $550,000
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 3MTC
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