ents are treated as overhead costs predetermined overhead rate based on the womber of that a patient spends in the hospital counts as one patient-day) to allocate supplies, and the overhead costs to patients. Recently a member of the hospital's accounting staff has suggested using two predetermined overhead rates Callocated based on the number of patient.duys) to improve the accuracy of the costs allocated to patients. The first overhead rate 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 esti- mated overhead costs, and two of its patients-Patient A and Patient B is provided below: total job cos, Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day ... ICU Other Total 2,000 18.000 20.000 $3,200,000 $14,000,000 $17.200.000 $236 $96 -2, L03-4 s. The com- ad rates are Patient A Patient B the Mold- based on timates: Direct materials Direct labor... Total number of patient-days (including ICU)... Number of patient-days spent in ICU.. $4.500 $25,000 14 0 $6.200 $36.000 21 7 a. ng DO DO 0 Required: 1. Assuming McCullough uses only one predetermined overhead rate, calculate: 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 accoun- tant, calculate: 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. 3. What insights are revealed by the staff accountant's approach? a. prds PROBLEM 3-21 Plantwide Versus Multiple Predetermined Overhead Rates 103-1, L03-2 Mason Company has two manufacturing departments Machining and Assembly. The company