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 $2,172,240 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: Rooms are cleaned daily; laundry for rooms is done, on average, every other day. 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? $______ 2. What overhead cost would be assigned to th
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Regis Place is a health-care facility that has been allocating its
Rooms are cleaned daily; laundry for rooms is done, on average, every other day.
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? $______
2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation?
| Rooms | $ |
| Laundry | $ |
| Nursing care | $ |
| Physical therapy | $ |
| General services | $ |
| Total | $ |
![### Overhead Costs and Cost Drivers in Healthcare Facilities
In the management of healthcare facilities, it is essential to understand the relationship between overhead (OH) costs and their associated cost drivers. The table below provides an overview of various overhead costs and their corresponding cost drivers:
| **OH Cost** | **Cost Driver (Quantity)** |
|--------------------------------------|----------------------------------|
| Rooms (depreciation, cleaning, etc.) | $302,400 | # of rooms (25 double) – 35 |
| Laundry | $90,720 | # of beds – 60 |
| Nursing care | $788,400 | # of nurse-hours annually – 43,800|
| Physical therapy | $576,000 | # of hours of rehab – 8,000 |
| General services | $414,720 | # of patient days – [To be determined] |
### Detailed Breakdown:
1. **Rooms (Depreciation, Cleaning, etc.):**
- **Cost:** $302,400
- **Cost Driver:** Number of rooms, specifically 35 rooms, including 25 double rooms.
2. **Laundry:**
- **Cost:** $90,720
- **Cost Driver:** Number of beds, total 60 beds.
3. **Nursing Care:**
- **Cost:** $788,400
- **Cost Driver:** Number of nurse-hours annually, totaling 43,800 hours.
4. **Physical Therapy:**
- **Cost:** $576,000
- **Cost Driver:** Number of hours of rehab, amounting to 8,000 hours.
5. **General Services:**
- **Cost:** $414,720
- **Cost Driver:** Number of patient days, which is yet to be determined.
Understanding these elements helps in accurate allocation of costs, ensuring informed financial planning, and optimizing resource utilization within the healthcare facility.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c3838e8-ed25-48b2-b2c4-39824838f983%2F4b322a1e-9789-4149-8c41-652cad4a9c8d%2F33n6imk_processed.png&w=3840&q=75)
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