Using the data in this chapter”s Review Problem for the direct and step methods of service

Using the data in this chapter’s Review Problem for the direct and step methods of service cost allocation, construct two spreadsheets. Build the spreadsheets so that they can be used as templates for any problem in direct or step cost allocation presented in this chapter. The following tables provide row and column headings to begin building the templates:

1. Assume that the order of allocation in the Review Problem is Housekeeping, Administration, Medical Records, and Patient Accounting. This change in allocation order may affect the total cost in each revenue center. Use the spreadsheet template for the direct method to assign service center costs.

2. Assume that the order of allocation is the same as in requirement 1. Use the spreadsheet template for the step method to assign service center costs.

 

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