Reference no: EM132945097

Question - Residence Care, a nursing home, which is linked to a large hospital, has been examining its budgetary control procedures with particular reference to overhead costs.

The level of activity in the facility is measured by the number of patients treated in the budget period. For the current year, the budget stands at 6,000 patients and this is expected to be met.

For months 1 to 6 this year (assume 12 months of equal length), 2,700 patients were treated. The actual variable overhead costs incurred during the six-month period are as follows:

Variable overhead costs: $

Staffing 59,400

Power 27,000

Supplies 54,000

Other 8,100

Total 148,500

The hospital accountant believes that the variable overhead costs will be incurred at the same rate during months 7 to 12 of the year.

Fixed overheads are budgeted for the whole year as follows:

Fixed overhead costs: $

Supervision 120,000

Depreciation 187,200

Other 64,800

Total 372,000

Required -

-Calculate the total budgeted variable overhead rate per patient for the first six months of the year. Prepare the overhead costs budget for the six-month period to the end of the year (months 7 to 12). You should list each cost category and cost item separately and also indicate the total budgeted overhead cost. What is the total budgeted overhead cost per patient reported by the nursing home for the last six months of the year? If necessary, round your answer to two decimals.

-The nursing home actually treated 3,800 patients during months 7 to 12, the total actual variable overhead costs were $203,300 and the total actual fixed overhead costs were $195,000. In a report format, flex the overhead costs budget and calculate the flexible budget variances for each category of overhead costs and for the total cost. What is the total actual overhead cost per patient reported by the nursing home for the last six months of the year? If necessary, round your answer to two decimals.