MANAGERIAL ACCOUNTING
17th Edition
ISBN: 9781264151455
Author: Garrison
Publisher: MCG
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Chapter 2, Problem 20P
1.
a.
To determine
Concept introduction:
Overhead rate: Overhead cost refers to those cost associated with running a business that can’t be linked to creating or producing a particular product or services. It is calculated as the total of indirect costs for a specific reporting period, divided by an allocation measure. There are wide range of allocation measures such as machine hours, direct labor hours, etc. Fixed costs, variable costs and semi-variable costs are the three types of overheads.
The ICU and other overhead rates.
1.
b.
To determine
Concept introduction:
Overhead rate: Overhead cost refers to those cost associated with running a business that can’t be linked to creating or producing a particular product or services. It is calculated as the total of indirect costs for a specific reporting period, divided by an allocation measure. There are wide range of allocation measures such as machine hours, direct labor hours, etc. Fixed costs, variable costs and semi-variable costs are the three types of overheads.
The total cost, including direct materials, direct labor and applied overhead, assigned to patient A and patient B.
2.
a.
To determine
Concept introduction:
Overhead rate: Overhead cost refers to those cost associated with running a business that can’t be linked to creating or producing a particular product or services. It is calculated as the total of indirect costs for a specific reporting period, divided by an allocation measure. There are wide range of allocation measures such as machine hours, direct labor hours, etc. Fixed costs, variable costs and semi-variable costs are the three types of overheads.
The predetermined overhead rate.
2.
b.
To determine
Concept introduction:
Overhead rate: Overhead cost refers to those cost associated with running a business that can’t be linked to creating or producing a particular product or services. It is calculated as the total of indirect costs for a specific reporting period, divided by an allocation measure. There are wide range of allocation measures such as machine hours, direct labor hours, etc. Fixed costs, variable costs and semi-variable costs are the three types of overheads.
The total cost, including direct materials, direct labor and applied overhead, assigned to patient A and patient B.
3.
To determine
Concept introduction:
Overhead rate: Overhead cost refers to those cost associated with running a business that can’t be linked to creating or producing a particular product or services. It is calculated as the total of indirect costs for a specific reporting period, divided by an allocation measure. There are wide range of allocation measures such as machine hours, direct labor hours, etc. Fixed costs, variable costs and semi-variable costs are the three types of overheads.
The insight that is revealed by the staff accountant’s approach.
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Objective 2 - Explain why plantwide and departmental overhead costing may not be accurate., 3 - Provide a detailed description of activity-based product costing. Glencoe Medical Clinic operates a cardiology care unit and a maternity care unit. Colby Hepworth, the clinic's administrator, is investigating the charges assigned to cardiology patients. Currently, all cardiology patients are charged the same rate per patient day for daily care services. Daily care services are broadly defined as occupancy, feeding, and nursing care. A recent study, however, revealed several interesting outcomes. First, the demands patients place on daily care services vary with the severity of the case being treated. Second, the occupancy activity is a combination of two activities: lodging and use of monitoring equipment. Since some patients require more monitoring than others, these activities should be separated. Third, the daily rate should reflect the difference in demands resulting from differences in…
Objective 2 - Explain why plantwide and departmental overhead costing may not be accurate., 3 - Provide a detailed description of activity-based product costing. Glencoe Medical Clinic operates a cardiology care unit and a maternity care unit. Colby Hepworth, the clinic's administrator, is investigating the charges assigned to cardiology patients. Currently, all cardiology patients are charged the same rate per patient day for daily care services. Daily care services are broadly defined as occupancy, feeding, and nursing care. A recent study, however, revealed several interesting outcomes. First, the demands patients place on daily care services vary with the severity of the case being treated. Second, the occupancy activity is a combination of two activities: lodging and use of monitoring equipment. Since some patients require more monitoring than others, these activities should be separated. Third, the daily rate should reflect the difference in demands resulting from differences in…
Activity-Based Product Costing
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients:
Patient Category
Driver
Normal
Intensive
Activity Rate
Treating patients
Treatments
7,400
9,500
$4.00
Providing hygienic care
Hygienic hours
5,300
18,600
5.00
Responding to requests
Requests
32,000
80,000
2.00
Monitoring patients
Monitoring hours
6,000
72,000
3.00
Required:
1. Determine the total nursing costs assigned to each patient category.
Costs Assigned
Normal
$fill in the blank 1
Intensive
$fill in the blank 2
2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent.
Normal
$fill in the blank 3 per patient day
Intensive
$fill in the blank 4 per patient day
3. Conceptual…
Chapter 2 Solutions
MANAGERIAL ACCOUNTING
Ch. 2.A - EXERCISE 2A-1 Activity-Based Absorption Costing...Ch. 2.A - EXERCISE 2A-2 Activity-Based Absorption Costing as...Ch. 2.A - EXERCISE 2A-3 Activity-Based Absorption Costing as...Ch. 2.A - PROBLEM 2A-4 Activity-Based Absorption Costing as...Ch. 2.A - Prob. 5PCh. 2.A -
CASE 2A-6 Activity-Based Absorption Costing and...Ch. 2.B - EXERCISE 2B-1 Overhead Rate Based on Capacity...Ch. 2.B - EXERCISE 2B-2 Overhead Rates and Capacity Issues...Ch. 2.B - Prob. 3PCh. 2.B - Prob. 4C
Ch. 2 - Prob. 1QCh. 2 - What is absorption costing?Ch. 2 - What is normal costing?Ch. 2 - How is the unit product cost of a job calculated?
Ch. 2 - Explain the four-step process used to compute a...Ch. 2 - What is the purpose of the job cost sheet in a...Ch. 2 - Explain why some production costs must be assigned...Ch. 2 - Why do companies use predetermined overhead rates...Ch. 2 - What factors should be considered in selecting an...Ch. 2 - If a company fully allocates all of its overhead...Ch. 2 - Would you expect the amount of applied overhead...Ch. 2 - Prob. 12QCh. 2 - What is a plantwide overhead rate? Whyare multiple...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 3AECh. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 1F15Ch. 2 - Prob. 2F15Ch. 2 - Prob. 3F15Ch. 2 - Prob. 4F15Ch. 2 - Prob. 5F15Ch. 2 - Prob. 6F15Ch. 2 - Prob. 7F15Ch. 2 - Prob. 8F15Ch. 2 - Prob. 9F15Ch. 2 - Prob. 10F15Ch. 2 - Prob. 11F15Ch. 2 - Sweeten Company had no jobs in progress at the...Ch. 2 - Prob. 13F15Ch. 2 - Prob. 14F15Ch. 2 - Prob. 15F15Ch. 2 - EXERCISE 2-1 Compute a Predetermined Overhead Rate...Ch. 2 - Prob. 2ECh. 2 - EXERCISE 2–3 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 24 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 2-5 Computing Total Job Costs and Unit...Ch. 2 - Prob. 6ECh. 2 - EXERCISE 2-7 Job-Order Costing; Working Backwards...Ch. 2 - EXERCISE 2-8 Applying Overhead Cost; Computing...Ch. 2 - EXERCISE 2–9 Job-Order Costing and Decision Making...Ch. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - EXERCISE 2—13 Departmental Predetermined Overhead...Ch. 2 - EXERCISE 214 Job-Orders Costing for a Service...Ch. 2 - Prob. 15ECh. 2 - PROBLEM 2—16 Plantwide Predetermined Overhead...Ch. 2 - PROBLEM 217 Plantwide and Departmental...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - PROBLEM 2-21 Plant wide Versus Multiple...Ch. 2 - CASE 2-22 Plantwide versus Departmental Overhead...
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