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Managerial Accounting

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Normal Job Order Costing: Calculating an Ambulence Ride (RD)

MGRACT-U3SPO4

Rising Dawn Medicine is a private ambulance service that provides emergency and transport services in the local county. Rising Dawn's actual and estimated costs for a heart attack patient being transported to another hospital are as follows:

  • Actual materials: \$1350
  • Actual labor: \$100 an hour for 8 hours
  • Actual overhead: \$50,000 a month
  • Predetermined overhead rate: \$600 per labor hour
  • Standard profit margin: 10% of cost

What should Rising Dawn charge the patient (and his/her insurance company)?