Answered: Parkview Medical Center estimates…

Parkview Medical Center estimates overhead costs of $36,800 for the radiology department. The estimated number of patient scans is 3,200. What is the overhead rate per patient scan?

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

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 2MTC: The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which...

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Draw a graph of the cost behavior for each of the following costs incurred by the Mountain Summit Hospital. The hospital measures monthly activity in patient days. Label both axes and the cost line in each graph.1. The cost of food varies in proportion to the number of patient days of activity. In January, the hospital provided 3,000 patient days of care, and food costs amounted to $24,000.2. The cost of salaries and fringe benefits for the administrative staff totals $12,000 per month.3. The hospital’s laboratory costs include two components: (a) $40,000 per month for compensation of personnel and depreciation on equipment and (b) $10 per patient day for chemicals and other materials used in performing the tests.4. The cost of utilities depends on how many wards the hospital needs to use during a particular month. During months with activity under 2,000 patient days of care, two wards are used, resulting in utility costs of $10,000. During months with greater than 2,000 patient days…
Novello 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 accumulated by each 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 $350,100 Depreciation expense 63,100 Utilities 36,700 Nurse salaries 525,800 Technician wages 172,300 Total operating room overhead $1,148,000 The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello Medical Center expects to use the operating room 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. hours b. Determine the predetermined operating room overhead…
Falls Creek Community Health Clinic uses the high-low method to analyze cost behavior and has determined that number of patients treated predict the clinic's total treatment costs. Determine the cost function (formula) for total treatment costs. What will the estimated treatment cost be if Falls Creek treats 1,402 patients in a month? Total Number Treatment of Patients Costs January $3,410 February $3,790 $3,574 $3,730 $4,500 1060 1180 March 1030 April 1260 May 1310 $4,294 June 1430 (Round your final answer to two decimal places)
The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which relate to its two biggest nursing service linesthe Emergency Room (ER) and the Operating Room (OR). SHHs current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by each line. Total hospital annual nursing costs for these two lines are expected to equal 300,000. The table below shows expected patient volume for both lines. Calculate the amount of nursing costs that the current cost system assigns to the ER and to the OR.
Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which relate to its two biggest nursing service linesthe Emergency Room (ER) and the Operating Room (OR). SHHs current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by each line. Total hospital annual nursing costs for these two lines are expected to equal 300,000. The table below shows expected patient volume for both lines. After discussion with several experienced nurses, Jack Bauer (SHHs accountant) decided that assigning nursing costs to the two service lines based on the number of times that nurses must check patients vital signs might more closely match the underlying use of costly hospital resources. Therefore, for comparative purposes, Jack decided to develop a second cost system that assigns total nursing costs to the ER and OR based on the number of times nurses check patients vital signs. This system is referred to as the vital-signs costing system. The earlier table also shows data for vital signs checks for lines. In an effort to better plan for and control OR costs, SHH management asked Jack to calculate the flexible budget variance (i.e., flexible budget costs - actual costs) for OR nursing costs, including the price variance and efficiency variance. Given that Jack is interested in comparing the reported costs of both systems, he decided to prepare the requested OR variance analysis for both the current cost system and the vital-signs costing system. In addition, Jack chose to use each cost systems estimate of the cost per OR nursing hour as the standard cost per OR nursing hour. Jack collected the following additional information for use in preparing the flexible budget variance for both systems: Actual number of surgeries performed = 950 Standard number of nursing hours allowed for each OR surgery = 5 Actual number of OR nursing hours used = 5,000 Actual OR nursing costs = 190,000 What does each of the calculated variances suggest to Jack regarding actions that he should or should not take with respect to investigating and improving each variance? Also, briefly explain why the variances differ between the two cost systems.
The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which relate to its two biggest nursing service linesthe Emergency Room (ER) and the Operating Room (OR). SHHs current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by each line. Total hospital annual nursing costs for these two lines are expected to equal 300,000. The table below shows expected patient volume for both lines. After discussion with several experienced nurses, Jack Bauer (SHHs accountant) decided that assigning nursing costs to the two service lines based on the number of times that nurses must check patients vital signs might more closely match the underlying use of costly hospital resources. Therefore, for comparative purposes, Jack decided to develop a second cost system that assigns total nursing costs to the ER and OR based on the number of times nurses check patients vital signs. This system is referred to as the vital-signs costing system. The earlier table also shows data for vital signs checks for lines. Calculate the amount of nursing costs that the vital-signs costing system assigns to the ER and to the OR.
St. Mark’s Hospital contains 450 beds. The average occupancy rate is 80% per month. In other words,on average, 80% of the hospital’s beds are occupied by patients. At this level of occupancy, the hospital’soperating costs are $32 per occupied bed per day, assuming a 30-day month. This $32 figure contains bothvariable and fixed cost elements.During June, the hospital’s occupancy rate was only 60%. A total of $326,700 in operating cost wasincurred during the month.Required:1. Using the high-low method, estimate:a. The variable cost per occupied bed on a daily basis.b. The total fixed operating costs per month.2. Assume an occupancy rate of 70% per month. What amount of total operating cost would you expectthe hospital to incur?
What is the level of fixed costs?
Health Cooperative is an outpatient surgical clinic. It budgets $829,900 of overhead cost for the year. The two main surgical units and their data follow. Service General surgery Orthopedic surgery 1. Compute a single plantwide rate, assuming the company allocates overhead cost based on 860 budgeted surgeries. 2. In May of this year, the company performed 33 general surgeries and 27 orthopedic surgeries. Allocate overhead to each of the two types of surgeries for May using the single plantwide overhead rate. Budgeted Surgeries 530 330 Complete this question by entering your answers in the tabs below. Required 1 Required 2 In May of this year, the company performed 33 general surgeries and 27 orthopedic surgeries. Allocate overhead to each of the two types of surgeries for May using the single plantwide overhead rate. General surgery Orthopedic surgery Plantwide Overhead Rate Number of Surgeries Allocated Cost
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 28,000 hours next year. Health-Temp charges the hospitals and clinics $80 per hour and has variable costs of $67.20 per hour (this includes the payment to the nurse). Total fixed costs equal $345,984. Required: 1. Calculate the contribution margin per unit and the contribution margin ratio (express the ratio as a decimal rather than a percentage). If required, round your answers to two decimal places. Contribution margin per unit $_____ Contribution margin ratio ______ 2. Calculate the sales revenue needed to break even.$______ 3. Calculate the sales revenue needed to achieve a target profit of $79,360.$______ 4. What if Health-Temp had target operating income (profit) of $97,280? Would sales revenue be larger or smaller than the one calculated in Requirement 3? LARGER By how…
Using the information below from Verdi Diagnostic Services, what is the formula for the total costs of X-rays? March April May X-Rays Taken X-ray Costs $13,500 $10,000 $7,500 7,000 5,000 3,000 O Total cost = $13,500+ ($0.57 x number of X-rays) B U O Total cost $1.75 + ($1,250x number of X-rays) O Total cost = $3,000 + ($1.50x number of X-rays) O Total cost = $2,000+ ($2.00 x number of X-rays)
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clin-ics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics $90per hour and has variable costs of $75.60 per hour (this includes the payment to the nurse). Totalfixed costs equal $321,000.Required:1. Calculate the contribution margin per unit and the contribution margin ratio.2. Calculate the sales revenue needed to break even.3. Calculate the sales revenue needed to achieve a target profit of $100,000.4. What if Health-Temp had target operating income (profit) of $110,000? Would sales revenuebe larger or smaller than the one calculated in Requirement 3? Why? By how much?