Investmet Decision

FratBro23
Category:
Accounting
Price: $10 USD

Question description

Hell Tutor.

I am sorry, Your answer was only pertaining to the Allocation of Costs. The one you sent me was incorrect. The is as follows:

Allocation of Costs
 
Analyze the following scenario: Jump Hospital currently allocates all maintenance department costs based on departmental square feet.  However, the manager of the pharmacy department has suggested that an ABC approach be used for the portion of the maintenance department costs that relate to repairing equipment.  Her contention is that the pharmacy has relatively little equipment that breaks.  However, it must subsidize many high-tech departments that require expensive equipment repairs.  Using the tables below, calculate the maintenance cost assigned to the pharmacy using the existing method and using an ABC approach.  Clearly label your calculations in your analysis.  Respond to at least two of your classmates’ postings.

Maintenance Costs

Routine Maintenance

Repairs

Total

Volume (Square Feet)

100,000

800

Labor Hours

10,000

4000

14,000

Labor Cost/Hour

$12.00

$18.00

$13.71

Supplies

$20,000

$80,000

$100,000

Administration

$15,000

Department Information

Pharmacy

All Other Departments

Total

Square Feet

2,000

98,000

100,000

Volume of Repairs

3

797

800

Hours of Repairs

6

3,994

4,000

Supplies Used for Repairs

$200

$79,800

$80,000

Can you answer this question before 10:00 tonight p.m.  Arizona time?

Tutor Answer

(Top Tutor) Daniel C.
(997)
School: Carnegie Mellon University
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