The Fixed Costs of Operating the Maintenance Facility of General

question 122

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 20X3 are as follows:
$\begin{array}{lrr}&\text { Budgeted hours }&\text { Actual hours }\\\text { Building and grounds } & 10,000 & 12,000 \\\text { Operating and emergency } & 8,000 & 8,000 \\\text { Patient care } & 21,000 & 22,000 \\\text { Administration } & 1,000 & 1,200 \\\text { Total } & 40,000 & 43,200\end{array}$ 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:

Antrum

Cavity of an ovarian follicle filled with fluid containing estrogen.

Prostatic Urethra

The portion of the urethra that runs through the prostate gland, involved in the excretion of urine in males.

Seminal Vesicles

Glands in the male reproductive system that produce and secrete fluid that is a major component of semen.

Peristaltic Contractions

Wave-like muscle contractions that move food through the digestive tract.