number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to these two cost pools and two of the hospital's patients-Patient A and Patient B-is provided below: ICU Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day 2,000 $ 3,252,000 $ 236 Other 18,000 $ 14,468,000 $ 96 Total 20,000 $ 17,720,000 Direct materials Patient A $5,800 Direct labor $ 28,250 Patient B $ 7,500 $ 38,600 Total number of patient-days (including ICU) 14 21 Number of patient-days spent in ICU 0 7 Required (see below for hints, if needed): 1.Assuming McCullough continues to use only one predetermined overhead rate, calculate: a. 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. (Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest dollar amount.) 1a. Predetermined overhead rate per patient-day 1b. Total cost for patient A 1b. Total cost for patient B 2a. Predetermined ICU overhead rate per patient-day 2a. Predetermined Other overhead rate per patient-day 2b. Total cost for patient A 2b. Total cost for patient B
number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to these two cost pools and two of the hospital's patients-Patient A and Patient B-is provided below: ICU Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day 2,000 $ 3,252,000 $ 236 Other 18,000 $ 14,468,000 $ 96 Total 20,000 $ 17,720,000 Direct materials Patient A $5,800 Direct labor $ 28,250 Patient B $ 7,500 $ 38,600 Total number of patient-days (including ICU) 14 21 Number of patient-days spent in ICU 0 7 Required (see below for hints, if needed): 1.Assuming McCullough continues to use only one predetermined overhead rate, calculate: a. 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. (Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest dollar amount.) 1a. Predetermined overhead rate per patient-day 1b. Total cost for patient A 1b. Total cost for patient B 2a. Predetermined ICU overhead rate per patient-day 2a. Predetermined Other overhead rate per patient-day 2b. Total cost for patient A 2b. Total cost for patient B
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead
costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining
to these two cost pools and two of the hospital's patients-Patient A and Patient B-is provided below:
ICU
Estimated number of patient-days
Estimated fixed overhead cost
Estimated variable overhead cost per patient-day
2,000
$ 3,252,000
$ 236
Other
18,000
$ 14,468,000
$ 96
Total
20,000
$ 17,720,000
Direct materials
Patient A
$5,800
Direct labor
$ 28,250
Patient B
$ 7,500
$ 38,600
Total number of patient-days (including ICU)
14
21
Number of patient-days spent in ICU
0
7
Required (see below for hints, if needed):
1.Assuming McCullough continues to use only one predetermined overhead rate, calculate:
a. 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.
(Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the
nearest dollar amount.)
1a. Predetermined overhead rate
per patient-day
1b. Total cost for patient A
1b. Total cost for patient B
2a. Predetermined ICU overhead rate
per patient-day
2a. Predetermined Other overhead rate
per patient-day
2b. Total cost for patient A
2b. Total cost for patient B
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