The Fixed Costs of Operating the Maintenance Facility of General

question 156

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 the year 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 budgeted usage for fixed operating costs and actual usage for variable operating costs?

---

Definitions:

Contextual Validity

The appropriateness of research or assessment methods and conclusions within the specific context they are applied.

Face Validity

The extent to which a test is subjectively viewed as covering the concept it purports to measure, often assessed through its appearance to non-experts.

Predictive Validity

The extent to which a score on a test or measurement accurately predicts future performance on a related task or behavior.

Concurrent Validity

The degree to which the results of a particular test or measurement correspond to those of a previously established measurement for the same construct.