GHA 4 GHA 4 Template This Assignment Is Designed To Help You ✓ Solved
Gha 4gha 4 Templatethis Assignment Is Designed To Help You Learn How T
This assignment is designed to help you learn how to determine total costs by combining direct and indirect costs for a particular department. In this assignment, you will determine the total costs for three departments: Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST). To do this, you will add the direct costs to the allocated indirect costs for each department, using the provided data and allocation bases.
The direct costs for each department are as follows:
- Physical Therapy (PT): $410,000
- Occupational Therapy (OT): $190,000
- Speech Therapy (ST): $120,000
The total direct costs for all departments combined are $720,000.
The indirect costs to be allocated are:
- Clerical Salaries: $56,000
- Administrative Salaries: $55,000
- Computer Services: $80,000
The total indirect costs amount to $191,000.
Allocation bases for each type of indirect cost are as follows:
- Clerical Salaries: based on visit volume.
- Administrative Salaries: based on the proportion of direct costs.
- Computer Services: based on the number of computers in service.
Visit volume in the departments is:
- Physical Therapy (PT): 9
- Occupational Therapy (OT): 4
- Speech Therapy (ST): 2
- Total: 16
Number of computers in service:
- Physical Therapy (PT): 9
- Occupational Therapy (OT): 4
- Speech Therapy (ST): 2
- Total: 15
Using this information, you will first determine how to allocate each type of indirect cost across the departments, then sum those allocations with the direct costs to find the total costs per department.
Follow these steps:
Step 1: Set up a table for direct and indirect costs per department.
Step 2: Allocate each category of indirect costs to departments based on their respective bases:
- Clerical Salaries: allocate based on visit volume.
- Administrative Salaries: allocate based on proportion of direct costs.
- Computer Services: allocate based on the number of computers in service.