Study Table 61 Table 62 and review the chapter text describing how the indirect cost is allocated. This assignment will change the allocation bases input for (A) Number of Visits (Volume) (B) Proportion of Direct Costs and (C) Number of Computers in Service.
Study Table 61 Table 62 and review the chapter text describing how the indirect cost is allocated. This assignment will change the allocation bases input for (A) Number of Visits (Volume) (B) Proportion of Direct Costs and (C) Number of Computers in Service.
Required 1. Compute the costs allocated to cost centers Clerical Salaries Administrative Salaries and Computer Services using the new allocation bases shown below. Use worksheet #1 that replicates the set up in Table 62. Total the new results. The new allocation bases are:
A = # Visits (Volume): PT = 9600/OT = 4000/ST = 2400/Total = 16000 (16000 $3.50 = $56000)
B = Proportion of Direct Costs: PT = 60%/OT = 25%/ST = 15%/Total = 100% (% $55000)
C = # Computers in Service: PT = 10/OT = 3/ST = 3/Total = 16 (16 $5000 each = $80000).
2. Using worksheet #2 that replicates the set up in Table 61 enter the new direct cost and the new totals for indirect costs resulting from your work. Total the new results.
Assignment Exercise 62: Responsibility Centers
Choose among the Case Study in Chapter 27 the clinic in Mini-Case Study 2 or the Metropolis Health System information as contained in its Case Study and the Appendix that contains its financial statements. Designate the responsibility centers and the support centers for the organization selected. Prepare a rationale for the structure you have designed.
Assignment Exercise 71: Analyzing Mixed Costs
The education coordinator decides that the community college packs may be unduly influencing the highlow computation. She decides to rerun the results omitting the community college volume.
Required
1. Using the monthly utilization information presented here and omitting the community college training packs find the fixed and variable portion of costs through the highlow method. Note that the college only acquires packs in three months of the year: January May and September. These dates coincide with the start dates of their semesters and summer school.
2. The reason the education coordinator needs to know how much of the cost is fixed is because she is supposed to collect the a
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