Kolinski Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital hastwo service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery.Departmental costsTelecommunications portsEmployeesMultiple ChoiceO$317.118$314,853$310,244Service DepartmentsTele communications$ 26,344$305,9213130Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments andAdministration Department costs are allocated on the basis of employees. The total Surgery Department cost after servicedepartment allocations is closest to:Administration$ 27,4721411Operating DepartmentSurgeryRecovery$ 282,750 $ 599,69040743427

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

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. Multiple Choice O $317318 Departmental costs Telecommunications ports Employees 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: $314,853 $310,244 Service Departments Tele communications $ 26,344 31 30 $305,921 Administration $ 27,472 Operating Department Surgery Recovery $ 282,750 $ 599,690 14 11 40 74 34 27

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. Multiple Choice O $317318 Departmental costs Telecommunications ports Employees 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: $314,853 $310,244 Service Departments Tele communications $ 26,344 31 30 $305,921 Administration $ 27,472 Operating Department Surgery Recovery $ 282,750 $ 599,690 14 11 40 74 34 27

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. Service Departments Operating Department Tele communications Administration Surgery Recovery $ 26,344 $ 27,472 $ 282,750 $ 599,690 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
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
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.…
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
Behrend Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics. Service Department Operating Department Personnel Support $ 55,040 Prenatal Pediatrics $ 29, 200 $ 242,050 $ 423,200 Departmental costs Employee hours Space occupied 5,000 1,000 26,000 14,000 3,000 2,000 35,000 8,000 Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to: Multiple Choice $441,260 $443,660 $433,440 $444,471
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…
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Patient Category Driver Normal Intensive Activity Rate Treating patients Treatments 7,400 10,000 $4.00 Providing hygienic care Hygienic hours 4,800 18,100 5.00 Responding to requests Requests 32,000 80,000 2.00 Monitoring patients Monitoring hours 6,000 72,000 3.00 Required: 1. Determine the total nursing costs assigned to each patient category. Costs Assigned Normal Intensive 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. Normal per patient day Intensive $4 per patient day 3. Conceptual Connection: The supervisor of the surgical ward has suggested that patient days is the only driver needed to assign nursing costs to each type of patient.…
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
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Treating patients Providing hygienic care Responding to requests Monitoring patients Required: Normal Intensive Driver Normal Treatments Intensive Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 7,900 1. Determine the total nursing costs assigned to each patient category. Costs Assigned per patient day per patient day 4,800 32,000 6,000 8,000 19,100 80,000 72,000 Activity Rate $4.00 5.00 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. 2.00 3.00
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: Activity Activity Rate Room and meals $176 per day Radiology $248 per image Pharmacy $38 per physician order Chemistry lab $96 per test Operating room $760 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 5 days 11 days Number of images 4 images 5 images Number of physician orders 7 orders 9 orders Number of tests 2 tests 5 tests Number of operating room hours 3 hours 6.5 hours a. Determine the activity cost associated with each patient. Abel Putin $fill in the blank 1 Cheryl Umit $fill in the blank 2 b. Why is the total activity cost different for the two patients? apparently had a…
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: Activity Activity Rate Room and meals $175 per day Radiology $247 per image Pharmacy $49 per physician order Chemistry lab $104 per test Operating room $720 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 6 days 11 days Number of images 3 images 7 images Number of physician orders 5 orders 7 orders Number of tests 2 tests 5 tests Number of operating room hours 4 hours 7 hours a. Determine the activity cost associated with each patient. Abel Putin $fill in the blank 1 Cheryl Umit $fill in the blank 2