Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications andAdministration, and two operating departments, Surgery and Recovery.Service DepartmentsOperating DepartmentTele communicationsAdministrationSurgeryRecovery$ 26,344$ 27,472$ 282,750$ 599,690Departmental costsTelecommunications portsEmployees3114403430117427Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on thebasis of employees. The total Surgery Department cost after service department allocations is closest to:Multiple Choice$317,118$314,853$310,244$305,921

Name: Kolinski Surgical Hospital uses the direct method to allocate service
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Description: Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications andAdministration, and two operating departments, Surgery and Recovery.Serv

Direct method allocation is one of the techniques for allocating the service cost to the operating…

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Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Service Departments Tele communications $ 26,344 Administration $ 27,472 Operating Department Recovery $ 599,690 Surgery $ 282,750 Departmental costs Telecommunications ports Employees 31 14 40 34 30 11 74 27 Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to: Multiple Choice $317,118 $314,853 $310,244 $305,921

Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Service Departments Tele communications $ 26,344 Administration $ 27,472 Operating Department Recovery $ 599,690 Surgery $ 282,750 Departmental costs Telecommunications ports Employees 31 14 40 34 30 11 74 27 Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to: Multiple Choice $317,118 $314,853 $310,244 $305,921

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 20E: Activity-based costing for a service company Crosswinds Hospital plans to use activity-based costing...

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Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Departmental costs Telecommunications ports Employees Multiple Choice O$317.118 $314,853 $310,244 Service Departments Tele communications $ 26,344 $305,921 31 30 Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to: Administration $ 27,472 14 11 Operating Department Surgery Recovery $ 282,750 $ 599,690 40 74 34 27
Projected Revenues by Patient Services Department Routine Care Laboratory Radiology Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments. Total revenues Projected Costs for All Departments Patient Services Departments (Direct Costs): Routine Care Laboratory Radiology Total costs Support Services Departments (Overhead Costs): Financial Services Facilities Housekeeping General Administration Human Resources Total overhead costs Total costs of both patient and support services Projected profit EXHIBIT 6.7 Kensington Hospital: Final Allocations Support Department (allocation rate) Financial Services ($0.05556) Facilities Housekeeping…
The California Community Hospital has two service departments, Cafeteria and Housekeeping, and two operating departments, Surgery and Outpatient. The hospital uses the direct method to allocate service department costs to operating departments. It allocates Cafeteria costs based on the number of employees. Departmental costs before allocation Number of employees Cafeteria $40,000 20,000 $6,316 $8,000 $30,000 $10,000 Housekeeping Surgery $10,000 $140,000 15,000 15,000 Knowledge Check 01 How much Cafeteria cost should be allocated to the Surgery department? Outpatient $360,000 45,000 Total $550,000
Identifying Direct and Indirect Costs Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an
ces Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Service General surgery Orthopedic surgery Patient services Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Square Feet 750 Activity Budgeted Cost $ Supplies Patient services Building cost 2,700,000 30,000 368,000 Surgical Hours 2,800 12, 200 Supplies Patient services Building cost Activity Cost Driver Surgical hours (SH) Number of Orthopedic Surgery Supplies Patient services Building cost patients Square feet Patients 300 1. Compute activity rates using activity-based costing. Budgeted Cost 100 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. 1,550 Budgeted Activity Usage 15,000 400 2,300 Budgeted Activity Usage 2.…
to these two cost pools and two of the hospital's patients-Patient A and Patient B—is provided below: Total ICU Other Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day 2,000 $ 3,252,000 $ 236 18,000 20,000 $ 14,468,000 $ 96 $ 17,720,000 Direct materials Patient A $ 5,800 Direct labor $ 28,250 Patient B $ 7,500 $ 38,600 Total number of patient-days (including ICU) Number of patient-days spent in ICU 14 21 0 7 Required (see below for hints, if needed): 1.Assuming McCullough continues to use only one predetermined overhead rate, calculate: a. The predetermined overhead rate. b. The total cost, including direct materials, direct labor, and applied overhead, assigned to Patient A and Patient B. 2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate: a. The ICU and Other overhead rates. b. The total cost, including direct materials, direct labor, and applied overhead, assigned to…
Formation of an Activity Dictionary A hospital is in the process of implementing an ABC system. A pilot study is being done to assess the effects of the costing changes on specific products. Of particular interest is the cost of caring for patients who receive in-patient recovery treatment for illness, surgery (noncardiac), and injury. These patients are housed on the third and fourth floors of the hospital. The floors are dedicated to patient care and have only nursing stations and patient rooms. A partial transcript of an interview with the hospitals nursing supervisor is as follows: 1. How many nurses are in the hospital? There are 101 nurses, including me. 2. Of these 100 nurses, how many are assigned to the third and fourth floors? Fifty nurses are assigned to these two floors. 3. What do these nurses do (please describe)? Provide nursing care for patients, which, as you know, means answering questions, changing bandages, administering medicine, changing clothes, etc. 4. And what do you do? I supervise and coordinate all the nursing activity in the hospital. This includes surgery, maternity, the emergency room, and the two floors you mentioned. 5. What other lodging and care activities are done for the third and fourth floors by persons other than the nurses? The patients must be fed. The hospital cafeteria delivers meals. The laundry department picks up dirty clothing and bedding once each shift. The floors also have a physical therapist assigned to provide care on a physician-directed basis. 6. Do patients use any equipment? Yes. Mostly monitoring equipment. 7. Who or what uses the activity output? Patients. But there are different kinds of patients. On these two floors, we classify patients into three categories according to severity: intensive care, intermediate care, and normal care. The more severe the illness, the more activity is used. Nurses spend much more time with intermediate care patients than with normal care. The more severe patients tend to use more of the laundry service as well. Their clothing and bedding need to be changed more frequently. On the other hand, severe patients use less food. They eat fewer meals. Typically, we measure each patient type by the number of days of hospital stay. And you have to realize that the same patient contributes to each type of product. Required: Prepare an activity dictionary with three categories: activity name, activity description, and activity driver.
Activity-based costing for a service company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: The activity usage information associated with the two patients is as follows: Determine the activity cost associated with each patient. Why is the total activity cost different for the two patients?
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency i clinics. Required: For each of the following costs incurred at Northwest Hospital, indicate whether it would most likely be a of the specified cost object. Cost Cost Object Direct Cost or Indirect Cost Example: Catered food served to patients A particular patient Direct Cost 1. The wages of pediatric nurses The pediatric department 2. Prescription drugs 3. Heating the hospital A particular patient The pediatric department The pediatric department A particular pediatric patient 4. The salary of the head of pediatrics 5. The salary of the head of pediatrics 6. Hospital chaplain's salary A particular patient A particular patient A particular department 7. Lab tests by outside contractor 8. Lab tests by outside contractor
A Community Hospital has two (2) service departments: Maintenance and Food Services. The hospital has three (3) patient care units, namely: General Medicine, OB, and Surgery. Additional information are as follows: Amount of cost to be allocated: Maintenance P 8,000,000 Food Services P 3,000,000 Allocation method: Maintenance Costs are allocated based on square foot assigned to the Food Service Costs are allocated based on number of meals served to the EXPECTED UTILIZATION RATES SQ. FT. Meals Served Food Services 10,000 30,000 Maintenance 10,000 10,000 Surgery 20,000 40,000 OB 30,000 30,000 General Medicine 30,000 90,000 TOTAL 100,000 200,000 Using the information, allocate the costs of the two (2) service departments with the three (3) patient care units using: Direct Method, Step Method – Maintenance First, Step Method – Food Services First, and Reciprocal Method.
The California Community Hospital has two service departments, Cafeteria and Housekeeping, and two operating departments Surgery and Outpatient. The hospital uses the direct method to allocate service department costs to operating departments. It allocates Cafeteria costs based on the number of employees. Outpatient $360,000 45,000 Cafeteria Housekeeping $10,000 15,000 Surgery $140,000 15,000 Total Departmental costs before allocation Number of employees $40,000 20,000 $550,000 Knowledge Check 01 How much Cafeteria cost should be allocated to the Surgery department? $6,316 $8,000 $30,000 O $10,000
Zamboanga Hospital plans to use the activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: (Refer to image) Determine the activity cost associated with Patient 2. a. P1,388 b. P 908 c. P1,816 d. P4,555