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FINANCIAL ACCOUNTING
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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Novello 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 accumulated by each 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 $162,300 Depreciation expense 29,300 Utilities 17,000 Nurse salaries 243,700 Technician wages 79,700 Total operating room overhead $532,000 The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.
Transcribed Image Text:Novello 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 accumulated by each 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 $162,300 Depreciation expense 29,300 Utilities 17,000 Nurse salaries 243,700 Technician wages 79,700 Total operating room overhead $532,000 The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.
The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Compute the estimated number of operating room hours for the year. 2,800 V hours b. Determine the predetermined operating room overhead rate for the year. $ 190 V per hour c. Conrad Goldsmith had a 6-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)? 2$ 1,140 d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $34,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. overapplied
Transcribed Image Text:The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Compute the estimated number of operating room hours for the year. 2,800 V hours b. Determine the predetermined operating room overhead rate for the year. $ 190 V per hour c. Conrad Goldsmith had a 6-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)? 2$ 1,140 d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $34,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. overapplied
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