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OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Сost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $ 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 24 Laundry Nursing care Physical therapy General services Total e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $

OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Сost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $ 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 24 Laundry Nursing care Physical therapy General services Total e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. $

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter18: Activity-based Costing
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OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Cost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: 2$ Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 2$ Laundry Nursing care Physical therapy General services Total 2$ e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar.
Transcribed Image Text:OH allocation using cost drivers Regis Place is a health-care facility that has been allocating its overhead costs to patients based on number of patient days. The facility's overhead costs total $5,430,600 per year and the facility (which operates monthly at capacity) has a total of 60 beds available. (Assume a 360-day year.) The facility's accountant is considering a new overhead allocation method using the following information: ОН Cost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $756,000 # of rooms (25 double) 35 Laundry 226,800 # of beds 60 Nursing care 1,971,000 # of nurse-hours annually 43,800 Physical therapy 1,440,000 # of hours of rehab 8,000 General services 1,036,800 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. a. How many patient days are available at Regis Place? days b. What is the current overhead rate per patient day? Note: Round your answer to the nearest whole dollar. c. Using the individual cost drivers, what is the overhead rate for each type of cost? Note: Round your answers to the nearest whole dollar. Rooms: 2$ Laundry: 2$ Nursing care: Physical therapy: $ General services: $ d. Assume a patient stayed at Regis Place for six days. The patient was in a single room and required six hours of nursing care and 30 hours of physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar. 2. What overhead cost would be assigned to this patient under the ABC method of overhead allocation? Note: Use the rounded rates from part (c) in your calculations. Rooms 2$ Laundry Nursing care Physical therapy General services Total 2$ e. Assume a patient stayed at Regis Place for six days. The patient was in a double room and required six hours of nursing care but did not require any physical therapy. 1. What overhead cost would be assigned to this patient under the current method of overhead allocation? Note: Round your answer to the nearest whole dollar.
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