Novello Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating roomis accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operatingroom overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:Disposable supplies$350,100Depreciation expense63,100Utilities36,700Nurse salaries525,800Technician wages172,300Total operating room overhead$1,148,000The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operatingroom 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.hoursb. Determine the predetermined operating room overhead rate for the year.per hourC. Conrad Goldsmith had a 7-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the ratedetermined in part (b)? The overnead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operatingroom 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.hoursb. Determine the predetermined operating room overhead rate for the year.per hourC. Conrad Goldsmith had a 7-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the ratedetermined in part (b)?d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $74,600. Determine the overappliede operating overhead or underapplied operating overhead for the period.overappliedFeedbackCheck My Workb. Use estimated annual operating room hours and estimated annual operating room overhead to find the predetermined overhead rate.C. Apply the predetermined overhead rate to the hours of actual surgery.d. Apply the predetermined overhead rate to the actual hours.Compare the actual overhead cost and the applied overhead cost.

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Answered: Novello Medical Center has a single…

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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