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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.

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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 leg. 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, unities, incidental medical supplies, and the labor costs associated with around the clock monitoring of patients are treated as overhead costs Historically, McCullough has used on predetermined overhead rate based on the number of patientdays (each night that a patient sponds in the hospital counts as one patient-day to allocate overhead costs to patients. For the most recent period, thes predetermined rate was based on three estimates-fixed overhead costs of $17.560,000, vartable overhead costs of $10 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-s provided below. Other Total Estimated number of patients 18.000 20.000 Estimated five overhead cost $ 3,236,00 $ 14,134,000 $ 17,500,000 Estimated variable overhead cost per patient-day Pot Direct saterials Direct labor Totalt af patient-cays including ICU> 537,00 14 23 Number of patient-days spent in ICU . 7 Required (see below for hints, I needed) 1. 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 Patort A and Patent B 2 Astuming McCullough calculates to 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 appled overhead, assigned to patient A and Pasert B. Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest dollar amount) Patient A 55,400 57.100 per day ta Pretormined overhead T5 Total cost for at T Tolent for patient 2. Preden ved at 2. Predetermined the overstate 20 Totalt for patient 20 Total out for at per party Doday Part 1: Make sure to include both the total variable overhead for each department you wat have to calculate this for each department and the total food overhead in your numerator when calculating the POHR See the video solution for Example 25. an in the course packet for an example of how to do this calculators Part 2: Make sure to include each departments variable and fed overhead in your calculation See the video solution for me 25. art in the courte Dacket for an example of how to do these calculation Part 2b. Make sure to keep in mind that the table lits total pocent days cluding ICU days and days for each patient. So you need to subtract to get the nonicu days when assigning overhead for other activities

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