the admitting department at Kriz hospital processed 1,000 patients last month. a total of 2,500 admitting personnel hours were consumed in processing the patients. The cost of the admitting dept. were $50,000. What are 2 possible allocation bases and rates?
YOu can allocate it per patient, or per hour.
I suspect that the admission dept spent money on labor whether or not there were patients. Was there cost different on different days of patient load?
This is the only information given so I am assuming there were no cost differences. I so need your help!
To determine possible allocation bases and rates for the admitting department at Kriz hospital, we need to understand what allocation bases are and how they can be used.
Allocation bases are factors used to distribute costs from a cost center to the different departments or activities that benefit from the costs. Different allocation bases can be used depending on the nature of the costs and the activities being supported.
In the case of the admitting department, some possible allocation bases could be the number of patients processed or the number of personnel hours consumed. Let's calculate the rates for both scenarios:
1. Allocation base: Number of Patients Processed
To determine the rate per patient, we divide the total cost of the admitting department ($50,000) by the total number of patients processed (1,000).
Rate = Total Cost / Total Number of Patients
Rate = $50,000 / 1,000
Rate = $50 per patient
2. Allocation base: Personnel Hours Consumed
To determine the rate per personnel hour, we divide the total cost of the admitting department ($50,000) by the total number of personnel hours consumed (2,500).
Rate = Total Cost / Total Personnel Hours
Rate = $50,000 / 2,500
Rate = $20 per personnel hour
Therefore, two possible allocation bases and rates for the admitting department at Kriz hospital are as follows:
1. Allocation Base: Number of Patients Processed
Rate: $50 per patient
2. Allocation Base: Personnel Hours Consumed
Rate: $20 per personnel hour