Question 1:

Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:

Disposable supplies$213,500Depreciation expense38,500Utilities22,400Nurse salaries320,600Technician wages105,000Total operating room overhead$700,000

The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.

a.Determine the predetermined operating room overhead rate for the year.

$ per hour

b.Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)?

$

c.During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $45,500. Determine theoverapplied operating overheadorunderapplied operating overheadfor the period. Enter your answer as a positive number.

$

Question 2

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,400 of indirect materials and $12,000 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301Job 302 Direct materials $9,000; Direct materials $21,100; Direct labor 7,700; Direct labor 16,800; Factory overhead 5,467; Factory overhead 11,928; Total $22,167 Total$49,828 Job 303Job 304Direct materials$25,200Direct materials$14,800Direct labor16,100Direct labor13,900Factory overheadFactory overhead

Required:

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.a. Direct and indirect materials used.b. Direct and indirect labor used.c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).d. Completion of Jobs 301 and 302.

CHART OF ACCOUNTSOld School Publishing Inc.General LedgerASSETS110Cash121Accounts Receivable125Notes Receivable126Interest Receivable131Materials132Work in Process133Factory Overhead134Finished Goods141Supplies142Prepaid Insurance143Prepaid Expenses181Land191Factory192Accumulated Depreciation-Factory

LIABILITIES210Accounts Payable221Utilities Payable231Notes Payable236Interest Payable241Lease Payable251Wages Payable252Consultant Fees Payable

EQUITY311Common Stock340Retained Earnings351Dividends390Income Summary

REVENUE410Sales610Interest Revenue

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.a. Direct and indirect materials used.b. Direct and indirect labor used.c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).d. Completion of Jobs 301 and 302.