Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.17MCQ
Comprehensive Care Nursing Home is required by statute and regulation to maintain a minimum 3 to 1 ratio of direct service staff to residents to maintain the licensure associated with the Nursing Home beds. The salary expense associated with direct service staff for the Comprehensive Care Nursing Home would most likely be classified as:
- 1. Variable cost.
- 2. Fixed cost.
- 3.
Overhead costs. - 4. Inventoriable costs.
Expert Solution & Answer
Learn your wayIncludes step-by-step video
schedule01:14
Students have asked these similar questions
Unk
The costs of the Accounting Department at Central Hospital would be considered by the Surgery
Department to be:
A. a) direct costs.
B. b) indirect costs.
C. c) incremental costs.
D. d) opportunity costs.
E. e) sunk costs.
Standard costs are divided into which of the following components?
A. price standard and quantity standard
B. quality standard and quantity standard
C. variance standard and quantity standard
D. materials standard and labor standard
Which of the following activity bases would be the most appropriate for food costs of a hospital?
A. how many MRI's are taken
B. number of patients who stay in the hospital
C. quantity of prescriptions filled
D. number of nurses scheduled to work
To calculate income from operations, total service department charges are
A. subtracted from operating expenses
B. subtracted from income from operations before service department charges
C. subtracted from gross profit margin
D. added to income from operations before service department charges
partial list of Foothills Medical Center’s costs follows:a. Cost of laundry services for operating room personnelb. Salary of intensive care personnelc. Depreciation on patient roomsd. Cost of blood testse. Nurses’ salariesf. Cost of patient mealsg. Overtime incurred in the Patient Records Department due to a computerfailureh. Operating room supplies used on patients (catheters, sutures, etc.)i. Doctor’s feej. Cost of X-ray testk. Cost of maintaining the staff and visitors’ cafeterial. Cost of drugs used for patientsm. Cost of intravenous solutions used for patientsn. Cost of improvements on the employee parking loto. Salary of the nutritionistp. General maintenance of the hospitalq. Cost of advertising hospital services on televisionr. Cost of new heart wings. Training costs for nursest. Depreciation of X-ray equipmentu. Utility costs of the hospital
Instructions1. What would be Foothills Medical Center’s most logical definition for the final cost object? Explain.2. Identify whether…
Chapter 2 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16MCQCh. 2 - Comprehensive Care Nursing Home is required by...Ch. 2 - Frisco Corporation is analyzing its fixed and...Ch. 2 - Year 1 financial data for the ABC Company is as...Ch. 2 - The following information was extracted from the...Ch. 2 - Computing and interpreting manufacturing unit...Ch. 2 - Direct, indirect, fixed, and variable costs....Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Classification of costs, manufacturing sector. The...Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Variable and Fixed Costs. Consolidated Motors...Ch. 2 - Variable costs, fixed costs, relevant range. Gummy...Ch. 2 - Prob. 2.29ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Total costs and unit costs, service setting....Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Inventoriable costs versus period costs. Each of...Ch. 2 - Computing cost of goods purchased and cost of...Ch. 2 - Cost of goods purchased, cost of goods sold, and...Ch. 2 - Flow of Inventoriable Costs. Renkas Heaters...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Interpretation of statements (continuation of...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Terminology, interpretation of statements...Ch. 2 - Labor cost, overtime, and idle time. David...Ch. 2 - Missing records, computing inventory costs. Ron...Ch. 2 - Comprehensive problem on unit costs, product...Ch. 2 - Prob. 2.46PCh. 2 - Cost classification; ethics. Paul Howard, the new...Ch. 2 - Prob. 2.48P
Additional Business Textbook Solutions
Find more solutions based on key concepts
LIFO, Conversion to FIFO. Inventory transactions tor Jack Franklin stores are summarized in the following table...
Intermediate Accounting
4. JC Manufacturing purchase d inventory for $ 5,300 and al so paid a $260 freight bill. JC Manufacturing retur...
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Capitalization of Interest, Specific and General Debt, Journal Entries, IFRS. How would the solution to E11-6 c...
Intermediate Accounting (2nd Edition)
Small Business Analysis Purpose: To help you understand the importance of cash flows in the operation of a smal...
Financial Accounting, Student Value Edition (5th Edition)
Name the five steps in process costing when equivalent units are computed.
Cost Accounting (15th Edition)
3. Which method almost always produces the most depreciation in the first year?
a. Units-of-production
b. Strai...
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Zamboanga Hospital plans to use the activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: (Refer to image) Determine the activity cost associated with Patient 2. a. P1,388 b. P 908 c. P1,816 d. P4,555arrow_forwardWrite down what expenses the medicalinstitution may refer to basic, and which tothe overhead.Division of expenses into conditionally constant (constant) and conditionally variable (variables)• Conditionally fixed (fixed) costs practically do not depend on the volume of services rendered(expenses on lighting of premises, heating, etc.).The amount of fixed costs remains unchanged when the volume of services rendered (time-based wages of workers, wages and accruals for wages of administrative staff, rental of premises,etc.).• Conditionally-variable (variable) costs vary inaccordance with the volume of services rendered (costs for the purchase of medicines, supplies, food, etc.). In other words, the total amount of variable costs varies in proportion to the volume of services provided.Distribution of expenses by various sources of financing, units, types of servicesA modern medical organization has a complex structure, provides a large number of different types of services, spends numerous…arrow_forwardLinear cost approximation. Dr. Young, of Young and Associates, LLP, is examining how overhead costs behave as a function of monthly physician contact hours billed to patients. The historical data are as follows:arrow_forward
- Which of the following will give you the most accurate allocation between a cost's fixed component and variable component? a. Examination of a students’ registration forms for miscellaneous fees and tuition fees b. Use of the least squares method to allocate the cost of electricity c. Dividing the total cost on the water bill among the different departments based on direct labor hours d. Dividing the total cost of the postpaid plan using the high-low methodarrow_forwardWhat types of overhead costs are considered in job costing for hospitals, and how are they allocated to patients or procedures?A. Facility Costs - Rent, property taxes, utilities B. Administrative Costs - Salaries of administrative staff, office supplies, software systems, and legal fees C. Medical supplies and Equipment - Overhead costs also cover the expenses incurred in maintaining and replenishing medical supplies, equipment, and instruments used throughout the hospital. Can you think of any other overhead costs that may be considered when a hospital is determining the cost of a procedure?arrow_forwardCheck image file for question Q1a. Allocate the service department costs to the two operating departments using the direct method. b.Allocate the service department cost to the two operating departments using ,I)the step-down method (Allocate administrative service first) . ii)the step down method (Allocoate Maintenance service first) c. Assuming you are the manager of the Daily Patient department.Discuss which method of cost allocation would you prefer.Justify your decision d.Mr Smith the financial controller of LabAid is convinced that the step-down method allocates more costs to the operating departments than the direct method.Do you agree with ,Mr Smith.Explain.arrow_forward
- Refer to Exhibit 3–12, which portrays the three types of allocation procedures used in two-stage allocation. Give an example of each of these allocation procedures in a hospital setting. The ultimate cost object is a patient-day of hospital care. This is one day of care for one patient. (Hint: First think about the various departments in a hospital. Which departments deal directly with patients; which ones are service departments and do not deal directly with patients? What kinds of costs does a hospital incur that should be distributed among all of the hospital’s departments? Correct hospital terminology is not important here. Focus on the concepts of cost allocation portrayed in Exhibit 3–12.)arrow_forwardQuestion 1. The Rye Village Clinic provides primary health care to local residents. For costing purposes, the clinic classifies its departments into three operating departments (Clinic, Radiology, and Laboratory) and three support departments (Administration, Housekeeping, and Medical Records). The allocation of Administration costs is based on the percentage of time spent in the department. The allocation of Housekeeping costs is based on floor space. The allocation of Medical Records cost is based on the number of entries to patient files. For the first week of May, the department managers report the following data: House- Medical Admin. keeping Records Clinic Radiology Lab. Total Total costs 250 50 200 800 500 400 2,200 Time spent [percentage] 10 10 20 30 20 10 100 Floor space [square feet) 3,000 2,000 14,000 1,000 500 2,500 5,000 Entries to patient files 500 1,500 4,500 500 2,000 Required: (a) Allocate the three support department costs to the three operating departments using the…arrow_forwardAn assisted-living facility provides services in the form of residential space, meals, and other occupant assistance (OOA) to its occupants. The facility currently uses a traditional cost accounting system that charges each occupant a daily rate equal to the facility’s annual cost of providing residential space, meals, and OOA divided by total occupant days. However, an activity-based costing (ABC) analysis has revealed that occupants’ use of OOA varies substantially. This analysis determined that occupants could be grouped into three categories (low, moderate, and high usage of OOA) and that the activity driver of OOA should be nursing hours. The driver of the residential space and meals is occupant days. The following quantitative information was also provided: OccupantCategory AnnualOccupantDays AnnualNursingHours Low usage 36,000 90,000 Medium usage 18,000 90,000 High usage 6,000 120,000…arrow_forward
- Could you outline the difference between a fixed cost and a variable cost?Could you identify which expense is a fixed cost and which is a variable cost from the information in the scenario (storage unit vs. hospital gowns)?Develop a plan to reduce both costs within the next fiscal year.arrow_forwardIdentifying Direct and Indirect Costs Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing anarrow_forwardBounce Back Insurance Company carries three major lines of insurance: auto, workers compensation, and homeowners. The company has prepared the following report: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records as follows: a. Complete the product profitability report through the administrative activities. Determine the operating income as a percent of premium revenue, rounded to the nearest whole percent. b. Interpret the report.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY