A to D need all answerrs Predetermined Factory Overhead Rate Poehling Medical Ce

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A to D need all answerrs

Predetermined Factory Overhead Rate

Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:

The overhead costs will be assigned to procedures based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.

a. Calculate the estimated number of operating room hours for the year.

b. Determine the predetermined operating room overhead rate for the year.
$ per hour

c. Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to her procedure, using the rate determined in part (b)?
$

d. During January, the operating room was used 194 hours. The actual overhead costs incurred for January were $81,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. Enter your answer as a positive number.
$

Disposable supplies $367,200 Depreciation expense 66,200 Utilities 38,500 Nurse salaries 551,400 Technician wages 180,700 Total operating room overhead $1,204,000

Explanation / Answer

Solution a:

Total week in a year = 52

Nos of weeks, operating room will shut down = 2 weeks

Usage of operating room in 1 year = 52-2 = 50 weeks

Average surgical hours per day = 8 hours

estimated number of operating room hours for the year = 50*7*8 = 2800 hours

Solution b:

Predetermined operating room overhead rate = $1,204,000 / 2800 = $430 per hour

Solution c:

Operating room overhead would be charged to Bill Harris on Jan 22 = 4 * $430 = $1,720

Solution d:

Operating room usage in january = 194 hours

Overhead applied in january = 194 * $430 = $83,420

Actual overhead cost incurred in january = $81,600

Overapplied operating overhead = $83,420 - $81,600 = $1,820

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