Reference no: EM132072479

Question - Job costing, service sector--- Memorial Hospital uses a job costing system for all patients who have surgery. The hospital uses a budgeted overhead rate for allocating overhead to patient stays. In March, the operating room had a budgeted allocation base of 1,000 operating hours. The budgeted operating room overhead costs were $58,000.

Patient Dwight Schuller was in the operating room 4 hours during March. Other costs related to Schuller's 4-hour surgery include:

Patient medicine $ 260

Cost of nurses 3,600

Cost of supplies 900

Physician cost is not included because physicians bill patients separately from the hospital billing system.

A. Explain why the hospital uses a job costing system instead of a process costing system.

B. Determine the budgeted (i.e., estimated) overhead rate for the operating room.

C. Determine the total hospital costs of Schuller's four-hour surgery.