Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency clinics. Required: For each of the following costs incurred at Northwest Hospital, indicate whether it would most likely be of the specified cost object. Cost Cost Object Direct Cost or Indirect Cost Example: Catered food served to patients A particular patient Direct Cost 1. The wages of pediatric nurses The pediatric department 2. Prescription drugs A particular patient 3. Heating the hospital The pediatric department 4. The salary of the head of pediatrics The pediatric department 5. The salary of the head of pediatrics A particular pediatric patient 6. Hospital chaplain's salary A particular patient 7. Lab tests by outside contractor A particular patient 8. Lab tests by outside contractor A particular department

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency clinics. Required: For each of the following costs incurred at Northwest Hospital, indicate whether it would most likely be of the specified cost object. Cost Cost Object Direct Cost or Indirect Cost Example: Catered food served to patients A particular patient Direct Cost 1. The wages of pediatric nurses The pediatric department 2. Prescription drugs A particular patient 3. Heating the hospital The pediatric department 4. The salary of the head of pediatrics The pediatric department 5. The salary of the head of pediatrics A particular pediatric patient 6. Hospital chaplain's salary A particular patient 7. Lab tests by outside contractor A particular patient 8. Lab tests by outside contractor A particular department

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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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…
To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected: Cost of Activity Activity Driver $ 546,780 2,132,200 441,630 4,185,700 $7,306,310 Activity Lodging Monitoring Feeding Nursing care Total The demands associated with patient severity are also provided: Severity Patient Days Monitoring Hours Nursing Hours High Medium Low 7,170 10,180 3,680 $ Patient days Monitoring hours used Patient days Nursing hours High severity Medium severity Low severity 15,170 12,030 3,260 133,100 72,900 14,300 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer to the nearest cent. per day 2. Compute activity rates using the given activity drivers (combine activities with the same…
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…
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 Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital's four patient service departments utilize the following amounts of space:Department A = 1,000 square feetDepartment B = 2,000 square feetDepartment C = 3,000 square feetDepartment D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to each department? Show all work. ....typing only
As production increases, the fixed cost per unit a. decreases b. remains the same c. increases d. either increases or decreases, depending on the variable costs Standard costs are divided into which of the following components? a. price standard and quantity standard b. quality standard and quantity standard c. variance standard and quantity standard d. materials standard and labor standard Which of the following activity bases would be the most appropriate for food costs of a hospital? a. how many MRI's are taken b. number of patients who stay in the hospital c. quantity of prescriptions filled d. number of nurses scheduled to work
McCullough Hospital uses a job-order costing system to assign costs to its patients. Its direct materials include a variety of items 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 individual patients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and the labor 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 a patient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. 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…
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 Human Resources Department Reg A2 Billing Health Care Retail Legal Services Total *This is the operating cost before allocating service department costs. Allocation Rate 20 Req B1 $ 900,000 Complete this question by entering your answers in the tabs below. x X Billing 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…
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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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 Service Departments Housekeeping Food Administrative Services Services $ 87,000 $ 301,060 Services $ 249,020 800 6,500 5,000 Departmental costs before allocations Allocations: Allocation Bases Square feet of space Meals served Files processed Housekeeping Services costs Food Services costs 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: Administrative Services costs Total costs after allocations 13,000 All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers. Housekeeping Services $…