Question: The Eaton Clinic computes a cost of treating each patient

The Eaton Clinic computes a cost of treating each patient. It allocates costs to departments and then applies departmental overhead costs to individual patients using a different budgeted overhead rate in each department. Consider the following predicted 20X0 data for two of Eaton’s departments:


3. At the end of 20X0, actual overhead costs were as follows:
Pharmacy ..... $240,000
Medical records .. $305,000
The pharmacy filled 82,000 prescriptions, and the clinic had 65,000 patient visits during 20X0.
Compute the overapplied or underapplied overhead in eachdepartment.
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  • CreatedNovember 19, 2014
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