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I he lop 10 Things to D | as eAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionl.ocator-asignment-take;šinpr B The Franklin Institute (P 1 + eBook Show Me How Calculator 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), physiclan surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies $299,600 75,000 32,000 278,500 126,900 $812,000 Depreciation expense Utilities Nurse salaries Technician wages Total operating room overhead Poshling Medical Center expects to use the The overhead costs will be assigned to procedures, based on the n operating room an average of eight hours per day, seven days per week. In addition, for general repairs. umber of surgical room hours. the operating room will be shut down two weeks per year a. Determine the predetermined operating room overhead rate for the year per hour 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)? Is The actual overhead costs incurred for January were $67.250. Determine the c. During January, the operating room was used 240 hours. overapplied operating overheed or underapplied oparating overhead for the period. 3:03 PM 2s/2o

Solution

Answer 1. Estimated Surgical Room hours = 8 hrs X 7 days X 50 weeks Estimated Surgical Room hours = 2,800 hrs Predetermined Operating Room Overehead Rate = $812,000 (Estimated Operating Room Overhead) / 2,800 Hrs (Allocating Rate) Predetermined Operating Room Overehead Rate = $290 per hour Answer 2. Operating Room Overhead = 5 hrs X $290 Operating Room Overhead = $1,450 Answer 3. Applied Overhead for Opearing Room = 240 Hrs X $290 Applied Overhead for Opearing Room = $69,600 Applied Overhead    69,600.00 Actual Overhead    67,250.00 Overapplied Overhead      2,350.00