Question
McCullough hopsital uses a job order costing system to assign costs to its patients. Historically Mccullough has used one predetermined overhead rate based on the
McCullough hopsital uses a job order costing system to assign costs to its patients. Historically Mccullough has used one predetermined overhead rate based on the number of patient days to allocate overhead costs to patients. Recently a member of the hospitals accounting staff has suggested 2 predereminted rats.
ICU Other Total
Estimated Number of patient days 2300 3600 6900
Est fixed overhead cost 4,158,400 4,830,000 8,988,400
Est variable overhead cost per patient day 301 120
Patient A Patient B
DIrect Materials 4800 6,500
DIrect Labor 25,750 36,600
Total number of patient days including ICU 12 17
Number of patient days spent in ICU 0 5
Required.
1.Assuming McCullough uses only pre-determined overhead rate calculate:
A. The pre determined 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, calulate:
A. The ICU and Other overhead rates.
B. The total cost, including direct materials, direct labor and applid overhead, assigned to patient a and patient B.
If you could please show clear calculations . Thank you!
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