Question

Cowley County Hospital uses a job-costing system for all patients who have surgery. In March, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 4,000 nursing hours and 2,000 nursing hours, respectively. The budgeted nursing overhead charges for each department for the month were $168,000 and $132,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $1,200,000 and 15,000 nursing hours for the month. For patient Fred Adams, actual hours incurred were eight and four hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 4 days (96 hours). Other costs related to Adams were: PRE-OP OR In-room Costs Costs Costs Patient medicine $ 200 $ 500 $2,400 Direct nursing time $1,000 $2,000 $3,000 The hospital uses a budgeted overhead rate for applying overhead to patient stays. Required: What is the total cost of the stay of patient Fred Adams?

Answer 1

	PRE-OP	OR	In-room
Budgeted nursing overhead charges $	168000	132000	1200000
Budgeted nursing hours	4000	2000	15000
Budgeted overhead rate $	42	66	80

Patient: Fred Adams
Patient medicine ($200 + $500 + $2400)	3100
Direct nursing time ($1000 + $2000 + $3000)	6000
Overhead charges:
Pre-Op (8 x $42)	336
OR (4 x $66)	264
In-room (96 x $80)	7680
Total overhead charges	8280
Total cost of the stay of patient $	17380

Answer 2

	PRE-OP	OR	In-room
Budgeted nursing overhead charges $	168000	132000	1200000
Budgeted nursing hours	4000	2000	15000
Budgeted overhead rate $	42	66	80

Patient: Fred Adams
Patient medicine ($200 + $500 + $2400)	3100
Direct nursing time ($1000 + $2000 + $3000)	6000
Overhead charges:
Pre-Op (8 x $42)	336
OR (4 x $66)	264
In-room (96 x $80)	7680
Total overhead charges	8280
Total cost of the stay of patient $	17380