The Hearts and Hands Clinic Has Two Service Departments (Human

question 52

Multiple Choice

The Hearts and Hands Clinic has two service departments (Human Resources and Information Systems) and two "production" departments (In-patient Treatment and Out-patient Treatment) . The service departments service the "production" departments as well as each other, and studies have shown that Information Systems provides the greater amount of service. Which of the following allocations would not occur if Hearts uses the step-down method of cost allocation?

• A) Information Systems cost would be allocated to Human Resources.
• B) Human Resources cost would be allocated to Information Systems.
• C) Human Resources cost would be allocated to In-patient Treatment.
• D) In-patient Treatment cost would be allocated to Out-patient Treatment.
• E) Both Human Resources cost would be allocated to Information Systems and In-patient Treatment cost would be allocated to Out-patient Treatment.

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Definitions:

Health Care

The organized provision of medical services to individuals or communities to maintain or improve health.

Hospitalization Costs

The expenses associated with a patient's stay and treatment in a hospital.

Alcoholics

are individuals who suffer from alcoholism, a chronic disease characterized by uncontrolled drinking and a preoccupation with alcohol.

Depression

A mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.