McCullough Hospital uses a job-order costing system to assign costs to its patients. Its direct materials include a variety ofitems such as pharmaceutical drugs, heart valves, artificial hips, and pacemakers. Its direct labor costs (e.g., surgeons,anesthesiologists, radiologists, and nurses) associated with specific surgical procedures and tests are traced to individualpatients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and thelabor costs associated with around-the-clock monitoring of patients are treated as overhead costs.Historically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that apatient 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 $110per patient-day, and a denominator volume of 20,000 patient-days.Recently a member of the hospital's accounting staff has suggested using two predetermined overhead rates (allocated basedon the number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate wouldinclude all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overheadcosts. Information pertaining to these two cost pools and two of the hospital's patients-Patient A and Patient B-is providedbelow:Estimated number of patient-daysEstimated fixed overhead costEstimated variable overhead cost per patient-dayDirect materialsDirect laborTotal number of patient-days (including ICU)Number of patient-days spent in ICUICU2,000$ 3,276,000$ 236Patient A1a. Predetermined overhead rate1b. Total cost for patient A1b. Total cost for patient B2a. Predetermined ICU overhead rate$ 6,400$ 29,7502a. Predetermined Other overhead rate2b. Total cost for patient A2b. Total cost for patient B140Patient BOther18,000$ 14,684,000$ 96Required:1. Assuming McCullough continues to use only one predetermined overhead rate, calculate:$ 8,100$ 39,800a. The predetermined overhead rate.b. The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B.2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate:a. The ICU and Other overhead rates.b. The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B.per patient-day217(Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers tothe nearest dollar amount.)per patient-dayper patient-dayTotal20,000$ 17,960,000

Overhead refers to the ongoing business expenses not directly attributed to creating a product or…

ems such as pharmaceutical drugs, heart valves, artificial hips, and pacemakers. Its direct labor costs (e.g., surgeons, nesthesiologists, radiologists, and nurses) associated with specific surgical procedures and tests are traced to individual atients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and the bor costs associated with around-the-clock monitoring of patients are treated as overhead costs. listorically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a atient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. For the most recent period, his predetermined rate was based on three estimates-fixed overhead costs of $17,960,000, variable overhead costs of $110 er patient-day, and a denominator volume of 20,000 patient-days. ecently a member of the hospital's accounting staff has suggested using two predetermined overhead rates (allocated based n the number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would clude all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead osts. Information pertaining to these two cost pools and two of the hospital's patients-Patient A and Patient B-is provided elow: Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day Direct materials Direct labor Total number of patient-days (including ICU) Number of patient-days spent in ICU ICU 2,000 $ 3,276,000 $ 236 a. Predetermined overhead rate 1b. Total cost for patient A 1b. Total cost for patient B 2a. Predetermined ICU overhead rate Patient A 2a. Predetermined Other overhead rate 2b. Total cost for patient A $ 6,400 $ 29,750 14 AL Todel equired: Assuming McCullough continues to use only one predetermined overhead rate, calculate: Patient B $ 8,100 $ 39,800 Other 18,000 $ 14,684,000 $ 96 . The predetermined overhead rate. The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate: . The ICU and Other overhead rates. .The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B. Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to me nearest dollar amount.) 21 7 per patient-day per patient-day per patient-day Total 20,000 $ 17,960,000