Culver's Medical operates three support departments and two operating units, Surgery and ER. The support departments areallocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR)departments is $270300, $154500, and $63000, respectively. Information on the hours used are as follows:Hours in AcctHours in AdminHours in HRAcctO $252768.$0.$275348.$277601.168Admin HR482048Surgery ER3601206522080130What are the total costs allocated to the surgery department from the supporting departments? (Do not round the intermediatecalculations.)

The cost allocation to the operating units from the support department will be allocated on the…

Answered: Culver's Medical operates three support…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Historically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a patient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. For the most recent period, this predetermined rate was based on three estimates—fixed overhead costs of $17,960,000, variable overhead costs of $110 per patient-day, and a denominator volume of 20,000 patient-days.Recently a member of the hospital’s accounting staff has suggested using two predetermined overhead rates (allocated based on the number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to these two cost pools and two of the hospital’s patients—Patient A and Patient B—is provided below: ICU Other Total Estimated number of patient-days…
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs IT HR Total IT $ 0 16 $ 152,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. HR 1,525 0 $ 247,950 152,000 Answer is not complete. Cost Allocation To: IT HR 152,000 $ 247,950 Publishing 2,440 24 $ 431,000 $ 247,950 Publishing $ Binding 2,135 40 $ 392,500 0 Binding 0
Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Departmental costs Telecommunications ports Employees Multiple Choice O$317.118 $314,853 $310,244 Service Departments Tele communications $ 26,344 $305,921 31 30 Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to: Administration $ 27,472 14 11 Operating Department Surgery Recovery $ 282,750 $ 599,690 40 74 34 27
Cheyenne's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $271000, $158300, and $68800, respectively. Information on the hours used are as follows: Hours in Acct Hours in Admin Hours in HR Acct O $0. O $91022. O $87397. O $96079. 16 8 Admin 20 4 HR 48 8 Surgery 360 120 65 ER 220 80 130 What are the total costs allocated from the HR department to the operating units? (Round intermediate calculations to 2 decimal places, e.g. 52.75.)
Solomon Information Services, Incorporated, has two service departments: human resources and billing. Solomon's operating departments, organized according to the special Industry each department serves, are health care, retall, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Department Human Resources Billing Health Care Retail Req A2 Legal Services Total 20 $ 900,000 Complete this question by entering your answers in the tabs below. Allocation Rate Req B1 *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Solomon adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department…
Woodbury Hospital provided the following data for its three service departments and three operating departments. Total cost Meals served Square feet of space Files processed Service Department Housekeeping Services Food Services Administrative Services Housekeeping Services $ 87,000 Departmental costs before allocations Allocations: Housekeeping Services costs Food Services costs Service Departments 5,000 Administrative Services costs Total costs after allocations Square feet of space Meals served Files processed Food Services $ 301,060 13,000 Allocation Bases Administrative Services $ 249,020 888 6,500 The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the following table: Housekeeping Services Operating Departments Laboratory $ 485,900 2,888 10,000 14,800 Radiology $ 520,500 1,000 7,500 7,000 All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospital's administrator…
Tenet Engineering, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred: Computer services (85% fixed) Building occupancy 347,000 674,000 Personnel costs 174,000 Total common costs $1,195,000 The following information is available concerning various activity measures and service usages by each of the divisions: Division A Division B Area occupied (square feet) 26,900 53,800 Рayroll $436,000 $236,000 Computer time (hours) Computer storage (megabytes) 280 300 4,400 -0- Equipment value Operating profit (pre-allocations) $205,000 $255,000 $767,500 $707,500 If common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division B (rounded to the nearest whole dollar)? Multiple Choice $216,625. $187,736. $180,939. $179,483.
Pronghorn's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $258900, $147700, and $70800, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What are the total costs allocated from the accounting department to the operating units? (Do not round the intermediate calculations.) O $0. O $275878. O $273926. O $264975.
Cheyenne's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $271000, $158300, and $68800, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What are the total costs allocated to the surgery department from the supporting departments? (Do not round the intermediate calculations.) O $280035. O $282405. O $256681. O $0.
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $489,600 are allocated on the basis of machine hours. The Accounting Department's costs of $122,400 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $210,000 and $410,000, respectively. Maintenance Accounting A B Machine hours 895 80 2,400 320 Number of employees 2 2 8 4 What is the Maintenance Department's cost allocated to Department A using the direct method? Note: Do not round intermediate calculations.
Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded: Supplying Department Human Resources Legal Testing Direct cost From: Human Resources Legal Testing Total Human Resources Costs 10% 10% $ 264,500 $ Allocated to: Domestic Legal 0 $ 15% 0 0 $ 190,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. Note: Do not round intermediate calculations. Global Using Department Testing 0 10% 0 0 $ 90,000 Domestic 50% 60% 45% $ 541,000 Global 25% 30% 45% $ 490,000
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumul patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies Depreciation expense Utilities Nurse salaries Technician wages $281,800 50,800 29,600 423,200 Total operating room overhead 138,600 $924,000 The overhead costs will be assigned to procedures based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight ho per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Calculate the estimated number of operating room hours for the year. 12 X hours b. Determine the predetermined operating room overhead rate for…

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