Predetermined Factory Overhead Rate Poehling Medical Center has a single operating room that is used...

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Accounting

Predetermined Factory Overhead Rate
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the
operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician
surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:
The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use
the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks
per year for general repairs.
a. Determine the predetermined operating room overhead rate for the year.
$
per hour
b. Ebony Jones had a five-hour procedure on January 22. How much operating room overhead would be charged to her procedure, using
the rate determined in part (a)?
$
c. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67,250. Determine the
overhead under- or overapplied for the period.
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