Finance Week 3 Problem

Key Information

Cost Drivers		Unit Measure

Financial Services		Patient Services Revenue
Facilities		Square Footage
Housekeeping		Labor Hours
Administration		Salary Dollars
Personnel		Salary Dollars


	Patient Services	Square Ft	Housekeeping	Salary Dollars
	Revenue		Labor Hours

Routine care	$ 14,000,000	165,000	68,000	$ 4,000,000
Laboratory	$ 5,000,000	30,000	3,800	$ 750,000
Radiology	$ 3,500,000	65,000	7,400	$ 1,056,300

Total	$ 22,500,000	260,000	79,200	$ 5,806,300


COMPLETE THE TABLE (Need to calculate allocation rate)

Overhead Allocation Rates
		Cost Pool	Cost Driver	Total utilization	Allocation Rate

Financial Services		$1,000,000	Patient Services Revenue	$ 22,500,000
Facilities		$2,600,000	Square Footage	260,000
Housekeeping		$1,200,000	Labor Hours	79,200
Administration		$3,000,000	Salary Dollars	$ 5,806,300
Personnel		$1,600,000	Salary Dollars	$ 5,806,300

Finance Week 3 Problem Solution

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