Wellspring Community Hospital has two patient service departments, medicine and surgery

Wellspring Community Hospital has two patient service departments, medicine and surgery. The patient service departments are supported by the housekeeping department, the financial services department, and the administration department. The administration department of Wellspring Community Hospital has compiled the following information: Housekeeping $200,000 direct costs 3,000 square feet 250 employees Administration $400,000 direct costs 5,000 square feet 500 employees Financial services $300,000 direct costs 2,000 square feet 100 employees Medicine $1 million direct costs 53,000 square feet 2,600 employees Surgery $1.5 million direct costs 40,000 square feet 2,300 employees Wellspring has determined that the cost driver for housekeeping is square feet and that the cost driver for administration and financial services is the number of employees. Using the direct method of cost allocation, what is the approximate allocation rate for housekeeping costs? (Round to the nearest cent.)a. $2.15b. $1.94c. $2.11d. $2.00e. $5.00

 

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