The Fixed Costs of Operating the Maintenance Facility of General

question 81

Essay

The fixed costs of operating the maintenance facility of General Hospital are $4,500,000 annually. Variable costs are incurred at the rate of $30 per maintenance-hour. The facility averages 40,000 maintenance-hours a year. Budgeted and actual hours per user for 2017 are as follows:

Assume that budgeted maintenance-hours are used to calculate the allocation rates.
Required:
a.If a single-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department?
b.If a single-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage?
c.If a dual-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department?
d.If a dual-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage? Based on budgeted usage for fixed operating costs and actual usage for variable operating costs?

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Definitions:

Radiolucent

Descriptive of a material or tissue that allows the passage of X-rays or other forms of radiation, appearing dark on the radiograph.

Radiopaque

A term describing substances that are impenetrable to X-rays and other forms of radiation, appearing white or light on radiographs.

Barium

A chemical element with symbol Ba and atomic number 56, used in medical imaging to improve the contrast of X-ray photographs.

Fluorescence

The emission of light by a substance that has absorbed light or other electromagnetic radiation, often seen in minerals, plant materials, and synthetic compounds.