perform surgical procedures. The cost of using the operating room is accumulated by each patient procedu 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 Total operating room overhead $358,700 64,700 37,600 538,600 176,400 $1,176,000 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, seve 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 I b. Determine the predetermined operating room overhead rate for the year. per hour c. Conrad Goldsmith had a 6-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)? d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $76,400. Determine the overapplied operating overhead or underapplied operating overhead for the period.
perform surgical procedures. The cost of using the operating room is accumulated by each patient procedu 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 Total operating room overhead $358,700 64,700 37,600 538,600 176,400 $1,176,000 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, seve 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 I b. Determine the predetermined operating room overhead rate for the year. per hour c. Conrad Goldsmith had a 6-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)? d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $76,400. Determine the overapplied operating overhead or underapplied operating overhead for the period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Depreciation expense
Utilities
Nurse salaries
Technician wages
Total operating room overhead
$358,700
64,700
37,600
538,600
176,400
$1,176,000
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
I
b. Determine the predetermined operating room overhead rate for the year.
per hour
c. Conrad Goldsmith had a 6-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)?
d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $76,400. Determine the overapplied operating overhead or underapplied operating
overhead for the period.
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