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Question 1 (20 marks) < Clement Wong, a recently employed cost accountant, works for the Brightness hospital which is renowned for its high success
Question 1 (20 marks) < Clement Wong, a recently employed cost accountant, works for the Brightness hospital which is renowned for its high success rate of liver transplant operation by one of the world's outstanding surgeons in this field. The hospital also provides different kinds of surgeries ranging from simple surgery to complicated surgery such as septal myectomy (a kind of heart surgery). Because of the unique nature of each kind of surgery, Brightness Hospital uses a job costing system for all patients who need surgery. Each patient concerned is treated by three departments, namely, Pre-Operation Checking Department, Operation Department and Hospitalization Department. < t Medicine costs Direct nursing costs Required: PRE-OP $ 800 $4,000 OP $ 2,000 $8,000 Hospitalization < $9,600 $12,000 < (a) Compute the budgeted overhead allocation rates for the Pre-Operation Checking Department, Operation Department and Hospitalization Department. (3 mark) < (b) Compute the total costs of the treatment of patient Patsy Kong under the Normal Costing approach. (Note: Breakdown of each cost component is necessary.) (12 marks) (c) Explain the reasons why a consulting firm might prefer to use a normal costing system instead of an actual costing system. (5 marks) < I 2
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