Barley Medical Center has a single operating room that is used by local physicia

Question

Barley Medical Center has a single operating room that is used by local physicians to perform surgicall procedares. The cost of using the operating room is CCumulated by each patient procedure and indudes the dredt materials costs (drugs and medical devices), physician sungical Sime, and operating roorm overhead. On January 1 of the current year, the annual operating room overhead is estimated to be Disposable supelies Depreciation expense Utilties Nurse salaries Tedheician wages $298,900 31,400 147,000 Total operating room overhead $980,000 The overtead conts will be asigned to pracedures based on the number of surgical reom hours.Barley Medical Center expects to use the operating room an average of eight hours per day, seven days per-k. In adason, the operating room-. be shut down two weeks peryear for-al repars. ) a Determine the predebermined operating room everhead rate for the year per hour b. Gretchen Kelton had a in part (a)? hour procedare on January 15. How much operating room overhead would be charged to her procndure, using the rate determined Duing laruary, the operating room was owl 186 hon. The actu" overhead costs incrred for law-ary were su,700. Determine the o operating ovehea or underapplied operating overhead for the perlod. Enber your anwer as a positive mb apphed O B GH 8

Explanation / Answer

a)Total estimated weeks in a year to be worked = 52-2 shut down=50

Total hours = 50*7*8= 2800

Predetermined overhead rate =estimated overhead/estimated hours

    = 980000/2800

    = $ 350 per Hour

2)Overhead assigned= 4*350 =$ 1400

3)Overhead applied = 186*350=$ 65100

Actual overhead : 63700

Overhead (overapplied )/underapplied =Actual -applied

              = 63700-65100

             = - 1400 overapplied [enter as 1400]

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