8) Managerial Financial Accounting Assignments AP2-19 Solution

# 8) Managerial Financial Accounting Assignments AP2-19 Solution

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AP2-19

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Service Company Use of Predetermined Overhead Rate [LO 6, 7, 9] Southwest Community Hospital uses a job-order costing system to track charges for each patient. The following charges relate to Candice O'Dea, who had laparoscopic knee surgery: Pha rma cy \$30 0 Ste rile sup ply 1,3 80 Sup plie s, oth er 4,3 90 Op erat ing roo m ser vic e (nu rsin g staf f) 4,3 30 An est hes ia 1,1 10 An est hes iolo gist 3,3 40 Southwest charges patients for the use of the operating room based on a predetermined overhead rate. The estimated overhead costs of the operating room are \$5,202,000, and the activity base is available hours of 2,040.
Calculate the predetermined overhead rate for the operating room, and determine the overhead charge to Candice. Assume that her surgery took 2 hours in the operating room.

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Unformatted text preview: Predetermined overhead rate \$ 5,100 Total overhead charge to Candice \$[no answer] AP2-19 The predetermined overhead rate is \$2,550 per hour of operating room use. (\$5,202,000 ÷ 2,040 hours = \$2,550). The total overhead charge to Candice for 2 hours of operating room usage is \$5,100 (\$2,550 × 2 hours). Calculate the total cost for the knee surgery. \$[no answer] AP2-19 The total cost of the knee surgery is \$19,950 . Pharmacy \$300 Sterile supply 1,380 Supplies other 4,390 OR services 4,330 Anesthesia 1,110 Anesthesiology 3,340 OR overhead charges 5,100 \$19,950...
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## This note was uploaded on 06/21/2011 for the course MANAGERIAL MT425 taught by Professor Hodgson,k during the Spring '11 term at Kaplan University.

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8) Managerial Financial Accounting Assignments AP2-19 Solution

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