Owl-Eye Radiologists0R) does vanous types or diagnostc imaging Radnkogists perfo

Question

Owl-Eye Radiologists0R) does vanous types or diagnostc imaging Radnkogists perform tests using sophisticated equpment OR's management wants to compute the costs of performing tests for two diflerent types of patiants those who are hospitalized (includng those in emergency rooms) and those who are not hospitalzed but are referred by physicians. The data for June for the two categories of patients follow Hospital Patients Other Patients Total Units (i e, procedures) produced Equipmant-hours used Direct labor-hours Direct labor costs Overhead costs 680 240 510 540,800 830 130 170 $10 200 1,510 370 680 $51,000 551,080 The accountant first assigns averhead costs to two pools overhead related to squpment hours and overhiead related to labor hours The analysis of overhead accounts by the cost accountant tolows mountRelated to Account uslities Supplies ndirect labor and supervision Equpment deprecation and manterance 9510 Equement hours Miscelaneous s 4800 Equipment-hours 12 500 Labar-hours 20,820 Labor-hours 9510 Equpment hours 3,450 Equipment hours Required:

Explanation / Answer

Calculation of the overhead Rate Equipment Related Overhead Costs Utilities 4800 Equipment Depreciation 9510 Miscellaneous 3450 Total Cost 17760 Equipment Hours 370 Overhead Rate 17760/370 48 Equipment related overhead $ 48 per Equipmwnt Hour Labour Related Costs Supplies 12500 Indirect Labour & Supervision 20820 Total 33320 Labour Hours 680 Overhead Rate 33320/680 49 Labour Related Overhead = $ 49 per labour hour Calculation of the cost Per Hour Hospital Other Patients Equipment Overhead 48 11520 6240 (240*48) (130*48) Labour Overhead 49 24990 8330 Direct Labour Cost 40800 10200 Total Cost 77310 24770 Per Unit 113.6912 29.84337

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