Owl-Eye Radiologists (OR) does various types of diagnostic imaging. Radiologists perform tests using sophisticated equipment. OR's management wants to compute the costs of performing tests for two different types of patients: those who are hospitalized (including those in emergency rooms) and those who are not hospitalized but are referred by physicians. The data for June for the two categories of patients follow:
Hospital Patients Other Patients Total
Units (i.e., procedures) produced 630 840 1,470
Equipment-hours used 240 120 360
Direct labor-hours 450 190 640
Direct labor costs $ 36,000 $ 11,400 $ 47,400
Overhead costs $ 50,280
The accountant first assigns overhead costs to two pools: overhead related to equipment-hours and overhead related to labor-hours. The analysis of overhead accounts by the cost accountant follows:
Account Amount Related to:
Utilities $ 4,900 Equipment-hours
Supplies 12,530 Labor-hours
Indirect labor and supervision 20,110 Labor-hours
Equipment depreciation and maintenance 9,400 Equipment-hours
Miscellaneous 3,340 Equipment-hours
Required:
a. Compute the predetermined overhead rates assuming that Owl-Eye Radiologists uses equipment-hours to allocate equipment-related overhead costs and labor-hours to allocate labor-related overhead costs.
equipment related per hour
labor related per hour
b. Compute the total costs of production and the cost per unit for each of the two types of patients undergoing tests in June. (Round "Cost per unit" to 2 decimal places.)