Unit 7

Assignment

NAME: GUISEPPINA SAIEVA

Numeric Problems (10 @ 5 = 50)

Use the following information for problems 1, 2, and 3.

David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer problems 22, 23 and 24.

| |Square Footage |Direct |Lab Tests |
| | |Expenses | |
|Utilities | |$200,000 | |
|Administration |2,000 |500,000 | |
|Laboratory |2,000 |625,000 | |
|Day-op Suite |3,000 |1,400,000 |4,000 |
|Cystoscopy |1,500 |300,000 |500 |
|Endoscopy |1,500 |600,000 |500 |
|Total |10,000 |$ 3,375,000 |5,000 |

What are the Day Op Suite’s total expenses?

[pic]Day Op Suite’s total expenses = $1,407,000

What are the Cystoscopy Department’s total expenses?

Cystoscopy Department’s total expenses = $302,000

What are the Endoscopy Department’s total expenses?

Endoscopy Department’s total expenses = $3,390,000

Use the following information for questions 4, 5, and 6.