StMatthew's Hospital Uses a Job-Order Costing System for All Patients

question 154

Multiple Choice

St.Matthew's Hospital uses a job-order costing system for all patients who have surgery.The following information is available:
$\begin{array} { l } \text { Budgeted indirect costs-pre-operating room}&\$84,000 \\ \text {udgeted indirect costs-operating room}&\$ 66,000\\ \text {Budgeted indirect costs-surgery recovery floor }&\$ 600,000\\ \text { Budgeted nursing hours-pre-operating roo}&4,000 \\ \text {Budgeted nursing hours-operating room }&1,000 \\ \text {Budgeted nursing hours - sur gery recovery floor }&7,500 \\\end{array}$

The cost driver for all indirect costs is nursing hours.The hospital uses a budgeted rate for indirect costs.The budgeted rate for indirect costs for the pre-operating room is ________.

• A) $21.00
• B) $43.25
• C) $66.00
• D) $80.00

---

Definitions:

Gross Pay

The entire sum an employee receives in earnings before any taxes or deductions are subtracted.

Deductions

Amounts subtracted from an employee's gross income to calculate taxable income, or expenses subtracted from gross revenue in accounting to determine net income.

Net Pay

The amount of money an employee takes home after deductions like taxes and retirement contributions have been subtracted from their gross pay.

Federal Insurance Contributions Act

A U.S. law that mandates the collection of Social Security and Medicare taxes from employees' paychecks and employers.