Yellville Regional Hospital is a small hospital with two service departments and three revenue areas:

\begin{array} { | l | r | r | r | } \hline \text { Senvice Dept } & \begin{array} { r } \text { Direct } \\\text { Costs }\end{array} & \text { Sq Ft } & \begin{array} { r } \text { Laundy } \\\text { Pounds }\end{array} \\\hline \text { Housekeeping } & \$ 80,000 & - & 16,000 \\\hline \text { Laundry } & \$ 132,000 & 500 & \\\hline \text { Revenue Areas } & & & \\\hline \text { Surgery } & \$ 400,000 & 1,500 & 48,000 \\\hline \text { Semiprivate Rooms } & \$ 200,000 & 2,000 & 24,000 \\\hline \text { Maternity } & \$ 150,000 & 1,000 & 12,000 \\\hline\end{array}

The hospital wants to allocate the service department costs to the revenue areas.Housekeeping is allocated based on square footage;Laundry is allocated based on pounds of laundry.The normal capacity for Surgery is 200 hours per month;normal capacity for semiprivate rooms is 600 patient days;and normal capacity for maternity is 200 patient days.Required:
Determine the overhead rate for the three revenue areas.Allocate the service department costs to the revenue areas using the step method.Allocate the service department with the largest dollar value first.

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