David Jones, the new administrator for a surgical clinic, was trying to determine now 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. Square Footage Direct Lab Tests Expenses $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 10,000 4,000 500 500 5,000

David Jones, the new administrator for a surgical clinic, was trying to determine now 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. Square Footage Direct Lab Tests Expenses $200,000 500,000 625,000 1,400,000 300,000 600,000 $3,375,000 Utilities Administration 2,000 Laboratory Day-op suite Cystoscopy Endoscopy Total 2,000 3,000 1,500 1,500 10,000 4,000 500 500 5,000

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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