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 Budgeted hours Actual hours
Building and grounds 10,000 12,000
Operating and emergency 8,000 8,000
Patient care 21,000 22,000
Administration 1,000 1,200
Total 40,000 43,200
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? Based on budgeted
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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The fixed costs of operating the maintenance facility of General Hospital are $4,500,000
annually....
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