Problem:
The housekeeping services department of R clinic, a multispecialty practice in CC had 165105 in direct costs during last year. These costs must be allocated to R Clinic three revenue producing patient services deparments using the direct method. Two cost drivers are under consideration: patient services revenue and hours of housekeeping services used. The patient services departments generated 7 million in total revenues during the year and to support these clinical activities they used 4663 hours of housekeeping services.
Required:
Question: What is the allocation rate if patient services revenue is used as the cost driver?
Note: Show supporting computations in good form.