Check Problem 2-20 Plantwide versus Multiple Predetermined Overhead Rates: Service Industry (LO2-1, LO2-2, LO2-3, LO2-4) McCullough Hospital 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 labor 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 labor 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 cay 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 rat would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all other overhead costs Information pertaining to the hospital's estimated number of patient.days, its estimated overhead costs and two of its patients-Patient A and Patient B-s provided below: Estimated number of patient days tinated fixed overhead cost Estimated variable overhead cost per patient day ICU 2.900 $3,057,600 366 Other 5.000 $ 5,603,600 Total 0.700 $10,656,200 Direct materials Direct labor Total number of patient davlat TCU Patient $ 5.400 527,25 2 Patient a $ 7.100 $ 17.00 2 Direct materials Direct labor Total number of patient-days (including ICU) Number of patient-days spent in ICU Patient A $ 5,400 $ 27.250 18 Patient B $ 7,100 $ 37,800 23 11 ed Required: 1. Assuming McCullough uses 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 patient A and Patient B. (Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest whole dollar amount.) per patient.day 1a Predetermined overhead rate 16 Total cost for patient A Total cost for patient 2a Predetermined ICU overhead tate Predetermined Other overhead rate 2b Total cost for patient A Total cost for patient B por patient day per patient day