Rosemont Hill Health Center Case Solution

To calculate the share of overheads, the cost is allocated to other department based on the amount of service provided. The reason being that most of the divisions are providing services to other divisions. Firstly, it was mentioned in the case that three nurses in the nursing section provide services to other sections. For example, one nurse is dedicated to adult medicine. Total salaries for the nursing section is $87,000 which means that one nurse’s salary is $29,000. So 29,000 was allocated to adult medicine division and deducted from the nursing section. Similarly, the other nurse divides her activities among two subdivisions: family planning and pediatrics. Therefore, the salary of another nurse was deducted from the nursing section and allocated to the two subdivisions. 

Secondly, the Social workers are responsible for providing services to other departments except for dental where social services are not needed. There are two MCW’s (Masters in Social Work) each has a salary of $35,000. Each worker spent 50% of his time in six sections. Half of the salaries is allocated to the Social services, and the other half is divided among the six divisions. There is one BA worker (Bachelors in Social work), who has a salary of $24,000. This worker divides his time equally among all seven sections. So the total salary is allocated among seven departments.

Finally, the overheads including rent, utilities, cleaning are allocated by square feet. Admin expense and Record keeping are allocated by salaries and number of patients respectively. The total cost for all the departments comes out to be $1,088,800. Cost per visit is shown in Exhibit 1. The Cost of an adult medicine visit is $130.