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Assume that the three patient services departments are adult services revenue and hours of housekeeping services for each department are:

Department	Revenue	Housekeeping
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

a. What is the dollar allocation to each patient service department if patient services revenue is used as the cost driver?

b. What is the dollar allocation to each patient services if hours of house keeping support are used as the cost driver?

c. What is the difference in the allocation to each department between the two drivers?

d. Which of the two divers is better? Why?

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Category:- Basic Finance
Reference No.:- M9792235

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