19 Feb Chapter 2, Problem 2-19Service Company Use of Pred
Chapter 2, Problem 2-19Service Company Use of Predetermined Overhead Rate [LO 6, 7, 9] Southwest Community Hospital uses a job-order costing system to track charges for each patient. The following charges relate to Candice O’Dea, who had laparoscopic knee surgery:Pharmacy $ 250Sterile supply 1,000Supplies, other 4,000Operating room service (nursing staff ) 4,000Anesthesia 1,000Anesthesiologist 3,000Southwest charges patients for the use of the operating room based on a predetermined overhead rate. The estimated overhead costs of the operating room are $5,000,000, and the activity base is available hours of 2,000.Requireda. Calculate the predetermined overhead rate for the operating room, and determine the charge to Candice. Assume that her surgery took 3 hours in the operating room.b. Calculate the total cost for the knee surgery.
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