The Housekeeping Services Department of Ruger Clinic, had $100,000 in direct costs during the year. Department                 Revenue                      HK Hours Adult Services             $3,000,000                  1,500 Pediatric Services       $1,500,000                  3,000 Other Services             $  500,000                     500 Total                $5,000,000                  5,000   What is the value of the cost pool? Which of the two cost drivers is better? Patient service revenue or housekeeping hours?  Why?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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  • The Housekeeping Services Department of Ruger Clinic, had $100,000 in direct costs during the year.

Department                 Revenue                      HK Hours

Adult Services             $3,000,000                  1,500

Pediatric Services       $1,500,000                  3,000

Other Services             $  500,000                     500

Total                $5,000,000                  5,000

 

  1. What is the value of the cost pool?
  2. Which of the two cost drivers is better? Patient service revenue or housekeeping hours?  Why?
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