San Jose Medical Center has a single operating room that isused by local physicians to perform surgical procedures. Thecost of using the operating room is acccumulated by each patientsprocedure and includes the direct materials costs (drugs andmedical devices), physician surgical time, and operating roomoverhead. On August 1 of the current year, the annualoperating room overhead is estimated to be:
Disposable supplies 116,700
Depreciation expense 18,000
Utilities 11,200
Nursesalaries 164,000
Technicianwages 57,600
Total Operating room overhead 367,500 The overhead costs will be assigned to procedures based on thenumber of surgical room hours. The Medical Center expects touse the operating room an average of seven hours per day, six daysper week. In addition, the operating room will be shut downtwo weeks per year for general repairs.
A. Determine the predetermined operating room overheadrate for the year.
B. Allison Mann had a 5-hour procedure on August 10. Howmuch operating room over-head would be charges toher procedure, using the rate determinied in part (A)?
C. During August, the operating room was used 182 hours. The actual overhead costs incurred for August were 30,700. Determine the overhead under-or overapplied for the period.