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?
To determine two possible allocation bases and rates, we need to understand the purpose of allocating costs and the factors that may drive those costs. In this case, the cost allocation is aimed at determining the expenses associated with processing each patient in the admitting department.
Allocation bases are factors that are used to allocate costs from a cost pool to cost objects. In this scenario, the cost pool is the admitting department's costs, and the cost objects are the patients.
Two possible allocation bases and rates for the admitting department could be:
1. Admittance per patient:
- Allocation base: Number of patients processed
- Allocation rate: Total cost of admitting department / Total number of patients processed
- Calculation: Allocation rate = $50,000 / 1,000 = $50 per patient
2. Personnel hours per patient:
- Allocation base: Total admitting personnel hours consumed
- Allocation rate: Total cost of admitting department / Total admitting personnel hours consumed
- Calculation: Allocation rate = $50,000 / 2,500 = $20 per personnel hour
By using these allocation bases and rates, the cost of processing each patient in the admitting department can be estimated.