spends in the hospital counts as one patient$-$day$)$ to allocate overhead costs to patients. Recently a member of the hospital$$s accounting staff has suggested using two predetermined overhead rates $($allocated based on the number of patient$-$days$)$ to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit $($ICU$)$ and the second overhead rate would include all Other overhead costs. Information pertaining to the hospital$$s estimated number of patient$-$days, its estimated overhead costs, and two of its patients$$Patient A and Patient B$$is provided below:

ICU Other Total

Estimated number of patient$-$days $3,60032,40036,000$

Estimated fixed overhead cost $ $5,954,400$ $ $32,756,400$ $ $38,710,800$

Estimated variable overhead cost per patient$-$day $ $290$ $ $123$

Patient A Patient B

Direct materials $ $6,100$ $ $7,800$

Direct labor $ $29,000$ $ $39,200$

Total number of patient$-$days $($including ICU$)2530$

Number of patient$-$days spent in ICU $018$

Required:

$1.$ Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate:

The ICU and Other overhead rates.

The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B$.$

$2.$ Assuming McCullough continues to use only one predetermined overhead rate, calculate:

The predetermined overhead rate.

The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B$.$