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Allocating costs of service centers to operating departments step method Wendel Health Care Center, Inc., has three clinics servicing the Birmingham metropolitan area The company’s legal services

Allocating costs of service centers to operating departments—step method

Wendel Health Care Center, Inc., has three clinics servicing the Birmingham metropolitan area. The company’s legal services department supports the clinics. Moreover, its computer services department supports all of the clinics and the legal services department. The annual cost of operating the legal services department is $960,000. The annual cost of operating the computer services department is $480,000. The company uses the number of patients served as the cost driver for allocating the cost of legal services and the number of computer workstations as the cost driver for allocating the cost of computer services. Other relevant information follows.

 

Number of

Number of

 

Patients

Workstations

Hoover clinic

6,000

15

Eastwood clinic

4,200

16

Gardendale clinic

5,800

12

Legal services

 

7

Computer services

 

10

 

Required

a. Allocate the cost of computer services to all of the clinics and the legal services department.

b. After allocating the cost of computer services, allocate the cost of legal services to the three clinics.

c. Compute the total allocated cost of service centers for each clinic.

Jun 24 2020 View more View Less

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