The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital’s four patient service departments utilize the following amounts of space: Department A = 1,000 square feet Department B = 2,000 square feet Department C = 3,000 square feet Department D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department A?
The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital’s four patient service departments utilize the following amounts of space: Department A = 1,000 square feet Department B = 2,000 square feet Department C = 3,000 square feet Department D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department A?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital’s four patient service departments utilize the following amounts of space:
Department A = 1,000 square feet
Department B = 2,000 square feet
Department C = 3,000 square feet
Department D = 4,000 square feet
Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department A?
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