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4 Problem 5-23 Plantwide versus Multiple Predetermined Overhead Rates: Service Industry (LO2, O3, LO5] 20 points 0250 30 McCullough Regional Medical Centre uses a job-order
4 Problem 5-23 Plantwide versus Multiple Predetermined Overhead Rates: Service Industry (LO2, O3, LO5] 20 points 0250 30 McCullough Regional Medical Centre uses a job-order costing system to assign costs to its patients. Its direct materials include a variety of items such as pharmaceutical drugs. heart valves, artificial hips, and pacemakers. Its direct labour costs (eg, surgeons anesthesiologists, radiologists, and nurses) associated with specific surgical procedures and tests are traced to individual patients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and the labour costs associated with around the clock monitoring of patients are treated as overhead costs Historically. McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a patient spends in the hospital counts as one patient day to allocate overhead costs to patients. Recently a member of the hospital's accounting staff has suggested using two predetermined overhead rates allocated based on the number of patient days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit CU) and the second overhead rate would include all Other overhead costs. Information pertaining to the hospitals estimated number of patient days, its estimated overhead costs and two of its patients-Patient A and Patient B- is provided below. Spa PE Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day ICU Other 2,020 19,970 $ 3, 74,511,520,250 $ 261 30 Direct materials Direct labour Total number of patient days (including 100) Number of patient days spent in ICU Patient $4,640 $29, 110 20 0 Patients $ 3,00 $42.930 20 20 Required: 1. Assuming McCullough calculates two overhead rates as recommended by the staff accountant calculate. The ICU and Other overhead rates Total number of patient days (including TCU) Number of patient days spent in ICU 20 10 4 4 20 points B08 Required: 1. 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 labour, and applied overhead, assigned to patient A and Patient B. 2. Assuming McCullough continues to use only one predetermined overhead rate, calculate a. The predetermined overhead rate. b. The total cost. Including direct materials, direct labour and applied overhead, assigned to patient A and Patient 8. 8 02:59:18 Skipped eto (Round your intermediate calculations and final answers to 2 decimal places.) Print per patient day per patient day 18 Predetermined ICU overhead rate Predetermined Other overhead rate 1b Total cost for patient A Total cost for patient 2a Prodotormined overhead rate 26 Total cost for patient Total cost for patient per patent day
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