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Question: mccullough hospital uses a joborder costing system to assign costs...

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McCullough Hospital uses a job-order costing system to assign costs to Its patlents. Its direct materials Include a variety of ltems such as pharmaceutical drugs, heart valves, artificial hips, and pacemakers. Its direct labor costs (e.g, surgeons, anesthesiologists, radiologists, and nurses) assocleted with specific surgical procedures and tests are traced to individual patients. All other costs, such as depreclation of medical equlpment, Insurance, utllities, Incidental medical supplies, and the labor costs assoclated with around-the clock monitoring of patients are treated as overhead costs Hlstorically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a patient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. Recently a member of the hospitals accounting staff has suggested using two predetermined overhead rates (allocated based on the number of patlent-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would Include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to the hospitals estimated number of patient-days, Its estimated overhead costs, and two of Its patients-Patient A and Patient B-is provided below C 008 Total ICU other 4,000 8,000 12,000 Estimated number of patient-days Estimated fixed overhead cost Estimated variable overhead cost per patient-day $6,556,000 $8,136,000 $14,692,000 278 $ Patient A Patient B $ 6,500 8,200 $,30,000 40,000 Direct materials Direct labor total number of patient-days (including zCu Number of patient-days spent in icu 29 34 Required: 1. Assuming McCullough uses 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 8 2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate: The ICU and Other overhead rates. b. The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B (Round Predetermined overhead rate to 2 decimal places. Round your Intermedlate calculations and final answers to the nearest dollar amount.) per patient- 1a. Predetermined overhead rate 1b. Total cost for patient A Total cost for patient B per patient- 2a. Predetermined ICU overhead rate per patient- Predetermined Other overhead rate 2b. Total cost for patient A Total cost for patient B
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