OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Сost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $ 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 24 Laundry Nursing care Physical therapy General services Total e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $
OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Сost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $ 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 24 Laundry Nursing care Physical therapy General services Total e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I need help
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education