9) Elmbrook Hospital uses a job-order costing system for all patients who have surgery. The following information is available:

Budgeted indirect costspre-operating room $84,000

Budgeted indirect costsoperating room $66,000

Budgeted indirect costssurgery recovery floor $600,000

Budgeted nursing hourspre-operating room 4,000

Budgeted nursing hoursoperating room 1,000

Budgeted nursing hourssurgery recovery floor 7,500

The cost driver for all indirect costs is nursing hours. The hospital uses a budgeted rate for indirect costs. A patient spent 8 hours in the pre-operating room, 4 hours in the operating room and 96 hours on the surgery recovery floor. What amount of indirect costs will be applied to this patient?

A) $336.00

B) $600.00

C) $7,680

D) $8,112 this is correct. Please explain why!

Answer: D