Question

St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to...

St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are:

General Administration $176014
Facilities 530638
Financial Services 300750

Selected data for the three support and four patient services departments are:

Department Patient Services Revenue Space (Square Feet) Housekeeping Labor Hours Salary Dollars
Support
General Administration 1161 197 144592
Facilities 21568 5227 2735043
Financial Services 1583 259 192662
Patient Services
Routine Care $2592517 40000 16563 1210982
Intensive Care 424167 4102 3195 473802
Diagnostic Services 551998 6420 1441 532090
Other Services 975954 10904 2103 742988

Assume that the hospital uses the step-down method for cost allocation, with salary dollars as the cost driver for general administration, housekeeping labor hours as the cost driver for facilities, and patient services revenue as the cost driver for financial services. Assume also that the general administration department provides the most services to other support departments, followed closely by the facilities department. The financial services department provides the least services to the other support departments.

Given these data, what percentage of the facilities department costs will be allocated to the intensive care department?

(Do not round intermediate calculations. Enter your final answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35.)

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Answer #1
Department general admin facilities financial services routine care intensive care diagnostic services other services
Cost ($) 176,014 530,638 300,750
Allocation basis salary dollars housekeeping labor hours
Cost allocation (176,014) 81766 5761 36203 14165 15907 22212
Total - 612404 306511
Cost allocation (612,404) 6732 430510 83045 37455 54662

Cost allocation to be dono further in the similar manner

% of cost of facilities dept allocated to intensive care dept will be =

= 83,045 / 612,404 = 13.56%

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