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 Depreciation expense S275.600 82.000 Utilities 45.700 329 900 218800 5952.000 Nure salaries Technician wages Total operating room overhead 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. ANSWER: d During January, the operating room was used 235 hours. The actual overhead costs incurred for January were $69,300. Determine the overhead under- roverapplied for the period.

Managerial Accounting: The Cornerstone of Business Decision-Making
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ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter3: Cost Behavior And Cost Forecasting
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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
Depreciation expense
$275,600
82,000
Utilities
45,700
Nurse salaries
Technician wages
Total operating room overhead
329,900
218,800
%24952,000
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.
ANSWER
d. During January, the operating room was used 235 hours. The actual overhead costs incured for January were $69,300. Determine the overhead under- or overapplied for the period.
Transcribed Image Text: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 Depreciation expense $275,600 82,000 Utilities 45,700 Nurse salaries Technician wages Total operating room overhead 329,900 218,800 %24952,000 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. ANSWER d. During January, the operating room was used 235 hours. The actual overhead costs incured for January were $69,300. Determine the overhead under- or overapplied for the period.
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