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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: Disposable supplies $295,600 Depreciation expense 75,000 Utilities 32,000 Nurse salaries 278,500 Technician wages 126,900 Total operating room overhead $812,000 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. c. 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 (b)? d. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67.250. Determine the overhead under- or overapplied for the period.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

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Chapter
Section
Chapter 19, Problem 19.10EX
Textbook Problem

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:

Disposable supplies $295,600
Depreciation expense 75,000
Utilities 32,000
Nurse salaries 278,500
Technician wages 126,900
Total operating room overhead $812,000

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.

  1. a. Calculate the estimated number of operating room hours for the year.
  2. b. Determine the predetermined operating room overhead rate for the year.
  3. c. 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 (b)?
  4. d. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67.250. Determine the overhead under- or overapplied for the period.

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Chapter 19 Solutions

Accounting
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Ch. 19 - Issuance of materials On May 7, Bergan Company...Ch. 19 - Issuance of materials On August 4, Rothchild...Ch. 19 - Direct labor costs During May, Bergan Company...Ch. 19 - Direct labor costs During August, Rothchild...Ch. 19 - Factory overhead costs During May, Bergan Company...Ch. 19 - Factory overhead costs During August, Rothchild...Ch. 19 - Applying factory overhead Bergan Company estimates...Ch. 19 - Applying factory overhead Rothchild Company...Ch. 19 - Job costs At the end of May, Bergan Company had...Ch. 19 - Job costs At the end of August, Rothchild Company...Ch. 19 - Transactions in a job order cost system Five...Ch. 19 - Cost of materials issuances under the FIFO method...Ch. 19 - Entry for issuing materials Materials issued for...Ch. 19 - Entries for materials GenX Furnishings...Ch. 19 - Entry for factory labor costs A summary of the...Ch. 19 - Entry for factory labor costs The weekly time...Ch. 19 - Entries for direct labor and factory overhead...Ch. 19 - Factory overhead rates, entries and account...Ch. 19 - Predetermined factory overhead rate Street....Ch. 19 - Predetermined factory overhead rate Poehling...Ch. 19 - Entry for jobs completed; cost of unfinished jobs...Ch. 19 - Entries for factory costs and jobs completed Old...Ch. 19 - Financial statements of a manufacturing firm The...Ch. 19 - Decision making with job order costs Alvarez...Ch. 19 - Decision making with job order costs Raneri...Ch. 19 - Job order cost accounting for a Service company...Ch. 19 - Job order cost accounting for a service company...Ch. 19 - Entries for costs in a job order cost system...Ch. 19 - Entries and schedules for unfinished jobs and...Ch. 19 - Job order cost sheet Remnant Carpet Company sells...Ch. 19 - Analyzing manufacturing cost accounts Fire Rock...Ch. 19 - Flow of costs and income statement Ginocera Inc....Ch. 19 - Entries for costs in a job order cost system Royal...Ch. 19 - Entries and schedules for unfinished Jobs and...Ch. 19 - Job order cost sheet Stretch and Trim Carpet...Ch. 19 - Analyzing manufacturing cost accounts Clapton...Ch. 19 - Flow of costs and income statement Technology...Ch. 19 - Communication TAC Industries sells heavy equipment...Ch. 19 - Predetermined overhead rates As an assistant cost...Ch. 19 - Communication Carol Creedence, the plant manager...Ch. 19 - Job order decision making and rate deficiencies...Ch. 19 - Recording manufacturing costs Todd Lay just began...

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