Question: Mercy Hospital uses a costing system for
Mercy Hospital uses a 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 1000 operating hours. The budgeted operating room overhead costs were $66 000. Patient Dwight Schuller was in the operating room four hours during March. Other costs related to Schuller’s four-hour surgery include: 
Physician cost is not included because physicians bill patients separately from the hospital billing system. Required a. Determine the budgeted (i.e., estimated) overhead rate for the operating room. b. Determine the total costs of Schuller’s four-hour surgery.
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