Poehling 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 $196,400 Depreciation expense 35,400 Utilities 20,600 Nurse salaries 295,000 Technician wages 96,600
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Poehling 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 | $196,400 | |
| 35,400 | ||
| Utilities | 20,600 | |
| Nurse salaries | 295,000 | |
| Technician wages | 96,600 | |
| Total operating room overhead | $644,000 |
The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling 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. Determine the predetermined operating room overhead rate for the year.
$fill in the blank 1 per hour
b. Bill Harris had a 7-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)?
$fill in the blank 2
c. During January, the operating room was used 194 hours. The actual overhead costs incurred for January were $43,600. Determine the overapplied operating overhead or underapplied operating overhead for the period.
$fill in the blank 3
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