A Hospital uses a job cost system for all surgery patients. In February, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours, respectively, and budgeted nursing overhead charges were $28,000 and $22,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month. PRE-OP, OR and the hospital floor have separate indirect cost pools. The hospital uses a budgeted overhead rate for applying overhead to patient stays. For patient Jones, actual hours incurred were six and eight hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 5 days (120 hours). Other costs related to Jones were: Required:
Determine the budgeted overhead rate for the hospital floor for surgery.

Question

A Hospital uses a job cost system for all surgery patients. In February, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours, respectively, and budgeted nursing overhead charges were $28,000 and $22,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month. PRE-OP, OR and the hospital floor have separate indirect cost pools. The hospital uses a budgeted overhead rate for applying overhead to patient stays. For patient Jones, actual hours incurred were six and eight hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 5 days (120 hours). Other costs related to Jones were:  Required:
Determine the budgeted overhead rate for the hospital floor for surgery.

Quizplus · Accepted Answer

The Answer of A Hospital uses a job cost system for all surgery patients. In February, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours, respectively, and budgeted nursing overhead charges were $28,000 and $22,000, respectively. The hospital floor for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month. PRE-OP, OR and the hospital floor have separate indirect cost pools. The hospital uses a budgeted overhead rate for applying overhead to patient stays. For patient Jones, actual hours incurred were six and eight hours, respectively, in the PRE-OP and OR rooms. He was in the hospital for 5 days (120 hours). Other costs related to Jones were:  Required:
Determine the budgeted overhead rate for the hospital floor for surgery.

A Hospital Uses a Job Cost System for All Surgery