Northeast Regional Hospital uses a job-order costing system to track patient charges.The following charges relate to Michael Carter, who had an appendectomy:• Pharmacy: $200•Sterile Supply: $900•Supplies, Other: $3,800•Operating Room Service (Nursing Staff): $3,500. Anesthesia: $1,200• Anesthesiologist: $2,800Northeast charges patients for the use of the operating room based on a predeterminedoverhead rate. The estimated overhead costs for the operating room are $4,800,000,and the activity base is 1,800 available hours.Michael's surgery took 2.5 hours in the operating room.(a) Calculate the predetermined overhead rate for the operating room and determinethe charge to Michael.(b) Calculate the total cost for the appendectomy.

Step 1: Definition of Predetermined Overhead RateA predetermined overhead rate is a cost assigned to…

Answered: Northeast Regional Hospital uses a…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 56P

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