To estimate the monthly maintenance cost for the maintenance department in a hospital, the following monthly costs areavailable:Monthly ExpenseSupervisor Salary ExpenseDepreciation Expense-Maintenance EquipmentRepairs Expense-Maintenance EquipmentSupplies ExpenseWages Expense-Maintenance Workers$10,000The Supervisor Salary Expense and the Depreciation Expense are fixed costs. The remaining expenses are variable costs. There are1,000 patient days in a month, which is the cost driver for maintenance costs. Estimate the cost function where Y is the monthlymaintenance cost and X is the variable cost per patient day.OY-58+$22XOY $30,000 $22.000xOY-$8,000-$22,000xOY-$8,000 $22X$5,000Costs$3,000$5,000$7,000

Answer : Cost driver = 1000 Patient days Fixed cost = Supervisor salary + Depreciation = $3000+$5000…

Maintenance Equipment tenance Equipment $5,000 $5,000 $7,000 stenance Workers $10,000 Expense and the Depreciation Expense are fixed costs. The remaining. a month, which is the cost driver for maintenance costs. Estimate the c X is the variable cost per patient day..

Maintenance Equipment tenance Equipment $5,000 $5,000 $7,000 stenance Workers $10,000 Expense and the Depreciation Expense are fixed costs. The remaining. a month, which is the cost driver for maintenance costs. Estimate the c X is the variable cost per patient day..

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

See similar textbooks

Similar questions

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
Novello 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 $350,100 Depreciation expense 63,100 Utilities 36,700 Nurse salaries 525,800 Technician wages 172,300 Total operating room overhead $1,148,000 The overhead costs will be assigned to procedures based on the number of surgical room hours. Novello 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. Compute the estimated number of operating room hours for the year. hours b. Determine the predetermined operating room overhead…
OH allocation using cost driversRegis 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 $2,172,240 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: OH Cost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $302,400 # of rooms (25 double) 35 Laundry 90,720 # of beds 60 Nursing care 788,400 # of nurse-hours annually 43,800 Physical therapy 576,000 # of hours of rehab 8,000 General services 414,720 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day.a. How many patient days are available at Regis Place? Answer daysb. What is the current overhead rate per patient day?Note: Round your answer to the nearest whole dollar.$Answerc.…
What is the value of the cost pool and allocation rate if patient service is used as cost driver and hours of housekeeping used as a cost driver? $100,000 in direct costs, $5 million in patient service revenues, & 5,000 hrs of housekeeping
OH allocation using cost driversRegis 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 $2,172,240 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: OH Cost Cost Driver (Quantity) Rooms (depreciation, cleaning, etc.) $302,400 # of rooms (25 double) 35 Laundry 90,720 # of beds 60 Nursing care 788,400 # of nurse-hours annually 43,800 Physical therapy 576,000 # of hours of rehab 8,000 General services 414,720 # of patient days ? Rooms are cleaned daily; laundry for rooms is done, on average, every other day. 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…
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 22,500 hours next year. Health-Temp charges the hospitals and clinics $120 per hour and has variable costs of $97.20 per hour (this includes the payment to the nurse). Total fixed costs equal $494,076. Required: 1. Calculate the contribution margin per unit and the contribution margin ratio (express the ratio as a decimal rather than a percentage). If required, round your answers to two decimal places. Contribution margin per unit $____ Contribution margin ratio ______ 2. Calculate the sales revenue needed to break even.$_____ 3. Calculate the sales revenue needed to achieve a target profit of $141,360.$______ 4. What if Health-Temp had target operating income (profit) of $173,280? Would sales revenue be larger or smaller than the one calculated in Requirement 3? By how…
General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs $1,093,754 Variable cost per inpatient day $19 Charge (revenue) per inpatient day $105 The hospital expects to have a patient load of 1,599 inpatient days next year. Assume that 18 percent of the hospital's inpatient days come from a managed care plan that wants a 27 percent discount from charges. What is the change in profit if the hospital accepts the proposal?
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$281,800Depreciation expense50,800Utilities29,600Nurse salaries423,200Technician wages138,600Total operating room overhead$924,000The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.a. Determine the predetermined operating room overhead rate for the year.$ per hour b. Bill Harris had a 8-hour procedure on January 22. How much…
Falls Creek Community Health Clinic uses the high-low method to analyze cost behavior and has determined that number of patients treated predict the clinic's total treatment costs. Determine the cost function (formula) for total treatment costs. What will the estimated treatment cost be if Falls Creek treats 1,402 patients in a month? Total Number Treatment of Patients Costs January $3,410 February $3,790 $3,574 $3,730 $4,500 1060 1180 March 1030 April 1260 May 1310 $4,294 June 1430 (Round your final answer to two decimal places)
The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital’s four patient service departments utilize the following amounts of space: Department A = 1,000 square feet Department B = 2,000 square feet Department C = 3,000 square feet Department D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department A?
The Housekeeping Department of Micanopy Hospital has direct costs of $500,000. The hospital's four patient service departments utilize the following amounts of space:Department A = 1,000 square feetDepartment B = 2,000 square feetDepartment C = 3,000 square feetDepartment D = 4,000 square feet Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to each department? Show all work. ....typing only
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clin-ics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics $90per hour and has variable costs of $75.60 per hour (this includes the payment to the nurse). Totalfixed costs equal $321,000.Required:1. Calculate the contribution margin per unit and the contribution margin ratio.2. Calculate the sales revenue needed to break even.3. Calculate the sales revenue needed to achieve a target profit of $100,000.4. What if Health-Temp had target operating income (profit) of $110,000? Would sales revenuebe larger or smaller than the one calculated in Requirement 3? Why? By how much?