Analyze the following scenario: Jump Hospital currently allocates all maintenance department costs based on departmental square feet. However, the manager of
the pharmacy department has suggested that an ABC approach be used for the portion of the maintenance department costs that relate to repairing equipment. Her
contention is that the pharmacy has relatively little equipment that breaks. However, it must subsidize many high-tech departments that require expensive
equipment repairs. Using the tables below, calculate the maintenance cost assigned to the pharmacy using the existing method and using an ABC approach. Clearly
label your calculations in your analysis.
|Volume (Square Feet)||100,000||800|
|Pharmacy||All Other Departments||Total|
|Volume of Repairs||3||797||800|
|Hours of Repairs||6||3,994||4,000|
|Supplies Used for Repairs||$200||$79,800||$80,000|
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"