Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 12, Problem 43P
Refer to the organization chart for Rocky Mountain General Hospital given in the preceding problem. Ignore the rest of the data in that problem. The following table shows the cost allocation bases used to distribute various costs among the hospital’s divisions.
Shown below are the amounts of each cost allocation base associated with each division.
Required:
- 1. Prepare a table similar to Exhibit 12–5 that distributes each of the costs listed in the preceding table to the hospital’s divisions.
- 2. Comment on the appropriateness of patient billings as the basis for distributing community outreach costs to the hospital’s divisions. Can you suggest a better allocation base?
- 3. Is there any use in allocating utilities costs to the divisions? What purposes could such an allocation process serve?
- 4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how the solution will change if the following information changes: the costs incurred were $200,000, $25,000, $200,000, and $50,000, for facilities, utilities, general administration, and community outreach, respectively.
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Chapter 12 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 12 - Why is goal congruence important to an...Ch. 12 - Define and give examples of the following terms:...Ch. 12 - Prob. 3RQCh. 12 - Explain the relationship between performance...Ch. 12 - What is the key feature of activity-based...Ch. 12 - What is the key feature of activity-based...Ch. 12 - Prob. 7RQCh. 12 - Define and give examples of the following terms:...Ch. 12 - Give an example of a common resource in an...Ch. 12 - Explain how and why cost allocation might be used...
Ch. 12 - Define the term cost allocation base. What would...Ch. 12 - Referring to Exhibit 125, why are marketing costs...Ch. 12 - Prob. 13RQCh. 12 - Why do some managers and accountants choose not to...Ch. 12 - Why is it important in responsibility accounting...Ch. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - What is meant by customer profitability analysis?...Ch. 12 - List seven areas in which nonfinancial,...Ch. 12 - Define the term manufacturing cycle efficiency.Ch. 12 - Prob. 21RQCh. 12 - What is meant by aggregate productivity, and what...Ch. 12 - Prob. 23RQCh. 12 - Using the Internet, identity the organizational...Ch. 12 - Prob. 25RQCh. 12 - Explain how an improvement in employee retention...Ch. 12 - For each of the following organizational subunits,...Ch. 12 - Prob. 28ECh. 12 - Prob. 29ECh. 12 - Xerox Corporation has been an innovator in its...Ch. 12 - The following data pertain to the Waikiki Sands...Ch. 12 - Lackawanna Community College has three divisions:...Ch. 12 - Countywide Cable Services, Inc. is organized with...Ch. 12 - Prob. 35ECh. 12 - Prob. 36ECh. 12 - Prob. 37ECh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - Rocky Mountain General Hospital serves three...Ch. 12 - Refer to the organization chart for Rocky Mountain...Ch. 12 - Prob. 44PCh. 12 - Buckeye Department Stores, Inc. operates a chain...Ch. 12 - Building Services, Co. (BSC) was started a number...Ch. 12 - Warriner Equipment Company, which is located in...Ch. 12 - Prob. 48PCh. 12 - MedTech, Inc. manufactures diagnostic testing...Ch. 12 - Prob. 50PCh. 12 - Cathys Classic Clothes is a retailer that sells to...Ch. 12 - Pacific Rim Industries is a diversified company...
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