Question

Deterie WC ysicians to perform Obl. 2 ed by each patient pro levices), physician surgical the annual operating EX 16-11 Predetermined factory overhead rate ✓ A. $290 per hour Pochling Medical Center has a single operating room operating room that is used by local physicia surgical procedures. The cost of using the operating room is accumulated by cedure and includes the direct materials costs (drugs and medical devices) time, and operating room overhead. On January 1 of the current year, the SHOW ME HOW room overhead is estimated to be: Disposable supplies Depreciation expense Utilities Nurse salaries Technician wages Total operating room overhead $299,600 75,000 32,000 278,500 126,900 $812,000 rage of eight hours The overhead costs will be assigned to procedures, based on the number of surgical hours. Poehling Medical Center expects to use the operating room an average of eight per day, seven days per week. In addition, the operating room will be shut down two per year for general repairs. A. Determine the predetermined operating room overhead rate for the year. B. Bill Harris had a five-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 240 hours. The actual overhead costs incurred for January were $67,250. Determine the overhead under- or overapplied for the period.

Answer 1

Answer with working notes is given below

A Pre-determined overhead rate Total Operating room overheads Total Operating hours $812,000 2,800 $290.00 per hour Operating hours hours per day Weeks in a year Net weeks Operating room used Total Operating hours per year 2,800 (8*7*50) B Joverhead charges for 5 hour procedure $1,450 (5*$290) | C January month Overhead applied Actual overhead incurred Over-applied overheads $69,600(240*$290) $67,250 $2,350