Allocation Essays

Healthcare Finance

Houston Dialysis Center is a department of Houston General Hospital, a full-service, not-for-profit acute care hospital with 325 beds. The bulk of the hospital’s facilities are devoted to inpatient care and emergency services. However, a 100,000 square-foot section of the hospital complex is devoted to outpatient services. Currently, this space has two primary uses. About 80 percent of the space is used by the Outpatient Clinic, which handles all routine outpatient services offered by the hospital. The remaining 20 percent…

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Destin Brass Products Co.

The estimated costs calculated using the activity-based costing method is very different from the existing standard unit costs and the revised unit costs. Exhibit 3 uses the traditional cost allocation system, which allocates all costs based on measures of volume. In the standard unit costs, Destin Brass uses direct labor as the only cost driver, which rarely meets the cause-effect standard wanted in cost allocation. Exhibit 4 is similar to exhibit 3, but instead, 4 uses materials and machine hours…

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