Grey's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $260,000, $150,000, and $60,000, respectively. Information on the hours used are as follows: What are the total costs allocated from the administrative department to the operating units?

Question

Grey's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $260,000, $150,000, and $60,000, respectively. Information on the hours used are as follows:  What are the total costs allocated from the administrative department to the operating units?

Quizplus · Accepted Answer

20 + 48 + 360 + 220 = 648
16 + 8 + 120 + 80 = 224
8 + 4 + 65 + 130 = 207
20 ÷ 648 = 3%
48 ÷ 648 = 7%
16 ÷ 224 = 7%
8 ÷ 224 = 4%
8 ÷ 207 = 4%
4 ÷ 207 = 2%
 11ee941a_b6c2_2056_bdb6_c50afbaf8140_TBW1041_00 Hrs in acct admin + hrs in acct hr + hrs in acct surg + hrs in acct ER = Total hrs in acct
Hrs in admin acct + hrs in admin hr + hrs in admin surg + hrs in admin ER = Total hrs in admin
Hrs in hr acct + hrs in hr admin + hrs in hr surg + hrs in hr ER = Total hrs in hr
Hrs in acct admin ÷ Total hrs in acct = % of hrs in acct admin
Hrs in acct hr ÷ Total hrs in acct = % of hrs in acct hr
Hrs in admin acct ÷ Total hrs in admin = % of hrs in admin acct
Hrs in admin hr ÷ Total hrs in admin = % of hrs in admin hr
Hrs in hr acct ÷ Total hrs in hr = % of hrs in hr acct
Hrs in hr admin ÷ Total hrs in hr = % of hrs in hr admin
Use excel with iterations on for remaining calculations
 11ee941a_b6c2_2057_bdb6_e198c73ce11a_TBW1041_00

Grey's Medical Operates Three Support Departments and Two Operating Units