Behrend Clinic uses the direct method to allocate service department costs to op

Question

Behrend Clinic uses the direct method to allocate service department costs to operating departments. The clnic has two service departments, Personnel and Support, and two operating departments, Prenatal and Service Departments Personnel Suppot Prenatal lcs $24,947 $42.030 109,700 $298840 Departmental costs Employee hours Space occupled 5,000 3,000 40,00010,000 5,000 1,000 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupled In square feet. The total Pedlatrics Department cost after the allocations of service department costs is closest to O $303 510 O $308,794 O $307.521 315,327

Explanation / Answer

Cost allocation under direct method :

so answer is d) $315327

Prenatal Pediatrics Departmental cost 109700 298840 Allocation of personnel department cost (2:1.8) 13130 11817 Allocation of support department (40:5) 37360 4670 Total cost 160190 315327

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