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The total overhead cost at an activity level of 7,700 patient visits per month should be $245,760
Its means the expenses that is associated with running of a firm but can not be linked to creating a product or service.
Calculation of overhead cost at an activity level of 7,700 patient visits per month:
Variable overhead costs:
Supplies = 7,700 x $5.40 = $41,580
Laundry = 7,700 x $8.40 = $64 680
Total variable overhead costs $106,260
Fixed overhead costs:
Wages and salaries 53,400
Occupancy costs 86,100
Total fixed overhead costs $139,500
Total overhead costs = $106,260 + $139,500
Total overhead costs = $245,760
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