The KLM Medical Clinic has two auxiliary departments: the Building Maintenance Department and the Energy Production Department as well as three main production departments: the Department of Paediatrics, the Department of Internal Medicine and the Department of Surgery. The CLM allocates the cost of the building maintenance department based on the area occupied by the departments in square meters and the cost of the energy department based on the days of hospitalization of patients. No distinction is made between variable and fixed cost elements. The budgeted operating figures for the previous year were as follows: Auxiliary sections Main production departments Building maintenance Energy production Pediatrics Department of Internal Medicine Surgical Estimated cost before allocation 18.000,00 8.000,00 80.000,00 50.000,00 90.000,00 Area (in sq.m) 1.000,00 4.000,00 6.000,00 18.000,00 12.000,00 Patient Hospitalization Days - - 5.500,00 7.700,00 8.800,00 Requested: To draw up a sheet for the reallocation of the costs of the auxiliary parts to the main production departments by the direct method (all amounts to be rounded to the nearest integer). To draw up a sheet for the reallocation of the costs of the auxiliary parts to the main production departments using the step-by-step method, starting from the allocation of the costs of the building maintenance department (all amounts to be rounded to the nearest integer).

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 2MTC: The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which...

See similar textbooks

Related questions

Question

The KLM Medical Clinic has two auxiliary departments: the Building Maintenance Department and the Energy Production Department as well as three main production departments: the Department of Paediatrics, the Department of Internal Medicine and the Department of Surgery. The CLM allocates the cost of the building maintenance department based on the area occupied by the departments in square meters and the cost of the energy department based on the days of hospitalization of patients. No distinction is made between variable and fixed cost elements. The budgeted operating figures for the previous year were as follows:


	Auxiliary sections	Main production departments
	Building maintenance	Energy production	Pediatrics	Department of Internal Medicine	Surgical
Estimated cost before allocation	18.000,00	8.000,00	80.000,00	50.000,00	90.000,00
Area (in sq.m)	1.000,00	4.000,00	6.000,00	18.000,00	12.000,00
Patient Hospitalization Days	-	-	5.500,00	7.700,00	8.800,00

Requested:

To draw up a sheet for the reallocation of the costs of the auxiliary parts to the main production departments by the direct method (all amounts to be rounded to the nearest integer).
To draw up a sheet for the reallocation of the costs of the auxiliary parts to the main production departments using the step-by-step method, starting from the allocation of the costs of the building maintenance department (all amounts to be rounded to the nearest integer).

Expert Solution