Need help with this accounting problem without use Ai Riverwood Medical Center uses a job-order costing system for allpatients who undergo diagnostic procedures. The following informationis available:Budgeted indirect costs - pre-diagnostic room: $120,000Budgeted indirect costs diagnostic room: $90,000Budgeted indirect costs recovery room: $550,000Budgeted nursing hours - pre-diagnostic room: 3,000 hoursBudgeted nursing hours - diagnostic room: 1,500 hoursBudgeted nursing hours - recovery room: 6,000 hoursThe cost driver for all indirect costs is nursing hours. The hospital uses abudgeted rate for indirect costs. What is the budgeted rate for indirectcosts in the pre-diagnostic room?a. $30.00b. $40.00c. $50.00d. $60.00

Step 1: Define Budgeted Indirect Cost RateThe Budgeted Indirect Cost Rate is calculated by dividing…

Answered: Riverwood Medical Center uses a…

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

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 56P

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ces Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Service General surgery Orthopedic surgery Patient services Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Square Feet 750 Activity Budgeted Cost $ Supplies Patient services Building cost 2,700,000 30,000 368,000 Surgical Hours 2,800 12, 200 Supplies Patient services Building cost Activity Cost Driver Surgical hours (SH) Number of Orthopedic Surgery Supplies Patient services Building cost patients Square feet Patients 300 1. Compute activity rates using activity-based costing. Budgeted Cost 100 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. 1,550 Budgeted Activity Usage 15,000 400 2,300 Budgeted Activity Usage 2.…
ictoria Hospital uses a job cost system for all patients who have surgery. In March, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 4 000 nursing hours and 2 000 nursing hours respectively. The budgeted nursing overhead charges forEACH department for the month were $168 000 and $132 000 respectively. The hospital floorfor patients who had undergone surgery, had budgeted overhead costs of $1 200 000 and 15 000nursing hours for the month. For patient Fred Adams, actual hours incurred were eight in thepre-operating room and four in the operating room. He was in the hospital for 4 days (96 hours).Other costs related to Adams were: PRE-OP Costs OR Costs In-room CostsPatient medicine $ 200 $ 500 $2 400Direct nursing time $1 000 $2 000 $3 000 The hospital uses a budgeted overhead rate for applying overheads to patient stays.Required:i. Identify THREE industries suited to using service costing in cost ascertainment.ii. Identify the applicable overhead…
Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its “products.” The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: Activity Budgeted Activity Cost Activity Base Scheduling and admitting $432,000 Number of patients Housekeeping 4,212,000 Number of patient days Nursing 5,376,000 Weighted care unit Total costs $10,020,000 Total “patient days” are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a little more than a…
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Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Budgeted Activity Activity Supplies Patient services Activity Cost Driver Surgical hours (SH) Number of patients Square feet Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Budgeted Cost $ 2,310,000 39,000 294,000 Service General surgery Orthopedic surgery Surgical Hours 2,600 8,400 Patients 300 200 Square Feet 720 1,380 Usage 11,000 500 2,100 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.
Behrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics. Departmental costs Employee hours Space occupied Multiple Choice O $441.260 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to $443,660 $433,440 Service Department Personnel Support $ 55,040 1,000 2,000 $444,471 $ 29,200 5,000 3,000 Operating Department Prenatal Pediatrics $ 242,950 $423,200 26,000 14,000 35,000 8,000
Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate $274 per day $386 per image $61 per physician order $108 per test $940 per operating room hour The activity usage information associated with the two patients is as follows: Room and meals Radiology Pharmacy Chemistry lab Operating room Number of days Number of images Number of physician orders Number of tests Abel Putin LA Abel Putin atient. 3 days 5 images 7 orders Number of operating room hours a. Determine the activity cost associated with each patient. LA 2 tests Cheryl Umi 9 days 6 images 9 orders 4.5 hours 5 tests 6.5 hours Cheryl Umit p. Why is the total activity cost different for the two patients? apparently had a different condition that equired more extensive treatment. Thus, the activity…
to these two cost pools and two of the hospital's patients-Patient A and Patient B—is provided below: Total ICU Other Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day 2,000 $ 3,252,000 $ 236 18,000 20,000 $ 14,468,000 $ 96 $ 17,720,000 Direct materials Patient A $ 5,800 Direct labor $ 28,250 Patient B $ 7,500 $ 38,600 Total number of patient-days (including ICU) Number of patient-days spent in ICU 14 21 0 7 Required (see below for hints, if needed): 1.Assuming McCullough continues to use only one predetermined overhead rate, calculate: a. The predetermined overhead rate. b. The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B. 2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate: a. The ICU and Other overhead rates. b. The total cost, including direct materials, direct labor, and applied overhead, assigned to…
Great Heart Clinic is a medical service institute that provides various services for its patients. The doctors working for the institute are required to fill out a note in the medical system for each patient treated. The system then generates a unique bill for each patient according to the pricing for the specific service or treatment received. Included in each patient’s bill is the applied overhead cost based on direct labor hours. The clinic created the following overhead budget for this year, but the actual overhead was $296,047. Budget Direct labor hours 10,000 Overhead costs: Indirect material $3,500 Indirect labor $45,000 Utilities $6,000 Insurance $78,000 Property taxes $30,000 Total $162,500 During this year, the doctors actually charged a total of 12,190 hours as shown below. Doctors Hours Charged Doctor A 2,000 Doctor B 1,850 Doctor C 1,960 Doctor D 2,100 Doctor E 2,500 Doctor F 1,780 Total 12,190 The overhead variance is deemed…
Pronghorn's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $258900, $147700, and $70800, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What are the total costs allocated from the accounting department to the operating units? (Do not round the intermediate calculations.) O $0. O $275878. O $273926. O $264975.
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 accumul 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 $281,800 50,800 29,600 423,200 Total operating room overhead 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 ho per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Calculate the estimated number of operating room hours for the year. 12 X hours b. Determine the predetermined operating room overhead rate for…
Sheffield's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $271300, $153300, and $66700, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What amount of costs would be allocated from the accounting department to the other support departments (admin and HR) using the reciprocal method to allocate costs? (Do not round the intermediate calculations.) O $30079. O $28381. O $0. O $29866.

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