Total cost Meals served Square feet of space Files processed Service Departments Service Department Housekeeping Services Food Services Administrative Services Housekeeping Food Administrative Services Services $ 98,000 $ 323,060 Services $ 271,020 1,900 8,700 6,100 16,300 Operating Departments Allocation Bases Square feet of space Meals served Files processed Laboratory Radiology $ 433,400 $ 564,500 4,200 2,100 13,300 8,600 19,500 12,500 General Hospital. $ 514,300 74,600 119,000 36,000 The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the following table: Total $ 2,204,280 82,800 172,000 68,000 All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers.

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…