Predetermined Factory Overhead Rate 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 Depreciation expense Utilities Nurse salaries Technician wages Total operating room overhead $281,800 50,800 29,600 423,200 138,600 $924,000 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. per hour b. Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)? c. During January, the operating room was used 194 hours. The actual overhead costs incurred for January were $62,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. $
Predetermined Factory Overhead Rate 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 Depreciation expense Utilities Nurse salaries Technician wages Total operating room overhead $281,800 50,800 29,600 423,200 138,600 $924,000 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. per hour b. Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)? c. During January, the operating room was used 194 hours. The actual overhead costs incurred for January were $62,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Predetermined Factory Overhead Rate
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
Depreciation expense
Utilities
Nurse salaries
Technician wages
Total operating room overhead
$281,800
50,800
29,600
423,200
138,600
$924,000
The overhead costs will be assigned 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.
per hour
b. Bill Harris had a 4-hour procedure on January 22.
How much operating room overhead would be charged
to his procedure, using the rate determined in part (a)?
$
c. During January, the operating room was used 194
hours. The actual overhead costs incurred for January
were $62,600. Determine the overapplied operating
overhead or underapplied operating overhead for the
period.
$
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