Historically, McCullough has used one predetermined overnead 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. For the most recent period, this

predetermined rate was based on three estimates$-$fixed overhead costs of $$17,840,000,$ variable overhead costs of $$110$ per patient$-$

day, and a denominator volume of $20,000$ patient$-$days.

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 $($ICU$)$ and the second overhead rate would include all Other overhead costs. Information pertaining

to these two cost pools and two of the hospital's patients$-$Patient A and Patient B$-$is provided below:

Estimated number of patient$-$days

Estimated fixed overhead cost

Estimated variable overhead cost per patient$-$day

Direct materials

Direct labor

Total number of patient$-$days $($including ICU$)$

Number of patient$-$days spent in ICU

Required:

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$.$

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$.$