LO.4 (OH allocation using cost drivers) Regis 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 $3,620,400 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 follow- ing information: Cost Cost Driver Quantity Rooms (depreciation, cleaning, etc.) $ 504,000 H of rooms (25 double) 35 Laundry 151,200 # of beds 60 Nursing care 1,314,000 # of nurse-hours annually 43,800 Physical therapy 960,000 f of hours of rehab 8,000 General services 691,200 H 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? b. What is the overhead rate per patient day? (Round to the nearest dollar.) c. Using the individual cost drivers, what is the overhead rate for each type of cost? (Round to the nearest dollar.)

LO.4 (OH allocation using cost drivers) Regis 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 $3,620,400 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 follow- ing information: Cost Cost Driver Quantity Rooms (depreciation, cleaning, etc.) $ 504,000 H of rooms (25 double) 35 Laundry 151,200 # of beds 60 Nursing care 1,314,000 # of nurse-hours annually 43,800 Physical therapy 960,000 f of hours of rehab 8,000 General services 691,200 H 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? b. What is the overhead rate per patient day? (Round to the nearest dollar.) c. Using the individual cost drivers, what is the overhead rate for each type of cost? (Round to the nearest dollar.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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