8. Sedgwick County Hospital uses job-costing system for the allocation of overhe
ID: 2546003 • Letter: 8
Question
8. Sedgwick County Hospital uses job-costing system for the allocation of overhead costs of Critical Care, Special Care, and General Care to patients. The overhead allocations rates are based on nursing days. In June, the budgeted nursing care charges for each department and budgeted allocation bases of nursing days are as follows: Budgeted nursing costs Budgeted nursing days Critical Care $2,480,000 5,000 Special Care S1,644,000 4,000 General Care S1,280,400 8,000 Patient Ms. Graves spent 30 days in hospital during June - six days in critical care, eight days in special care, and 16 days in the general care area.
Explanation / Answer
a.Determine the budgeted overhead rate for each department
.Overhead rate critical care= $2,480,000/ 5,000
nursing days= $496.00 per day
Overhead rate special care= $1,644,000/4,000
nursing days= $411.00 per day
Overhead rate general= $1,280,400/ 8,000
nursing days= $160.05 per day
b.What are the total charges to Ms. Graves if she was in the facility the entire month?
Critical Care charges= $496.00 x 6 days= $2,976.00
Special Care charges= $411.00 x 8 days= $3,288.00
General Care charges= $160.05 x 16 days= $2,560.80
Patient medicine; and direct doctor care
Critical Care charges = 1200+2000 = 3200
Special Care charges = 800+1000= 1800
General Care charges = 1400+2500 = 3900
Total overhead = $17724.8
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