Question

Riddick's Radiology Center (RRC) performs X-rays, ultrasounds, computer tomography (CT) scans, and magnetic resonance imaging (MRI). RRC has developed a reputation as a top radiology center in the state. RRC has achieved this status because it constantly reexamines its processes and procedures. RRC has been using a single, facility-wide overhead allocation rate. The vice president of finance believes that RRC can make better process improvements if it uses more disaggregated cost information. She says, "We have state-of-the-art medical imaging technology. Can't we have state-of-the-art accounting technology?" (Click the icon to view the budgeted information.) Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis. Start by calculating the budgeted overhead rate for total indirect costs based on total labor. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to two decimal places, X.XX. Abbreviations used: DC Direct cost, DL Direct labor, S dollar.) Total indirect costs Total technician labor cost Budgeted overhead rate S 672,480 $ 448,320 $ 1.50 per DL $ Now calculate the total budgeted costs for each service and the budgeted cost per each service using direct technician labor costs as the allocation basis. (Round the budgeted cost per service to the nearest cent. MRI CT scan 160.720 $ Technician labor S 101,000 851.000 466,200 Depreciation Materials X-rays Ultrasound 73,500 $ 113,100 S 6,300 276,500 16.400 110.250 169,650 212,650 $ 575,650 $ 22.600 23,900 241.080 30.900 151.500 Indirect costs S 891,900 $ 1.134,400 Total budgeted costs S 40.27 $ 152.29 $ 323.15$ 497.54 Budgeted cost per service Requirement 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if RRC allocated overhead costs using activity-based costing. Begin by calculating the cost driver rate per activity. (Round the answers to live decimal places, "X.XXXXX") Cost driver rate Administration Choose from any list or enter any number in the input fields and then click Check Answer. ? 8 8 pants Clear All remaining Check Answer

Answer 1

1. Answered by you was correct.

2. Calculation of budgeted cost per service

	Cost	Basis	volume	cost /volume
Adm	22,560	no.of procedures	14,100	1.6
Maintenance	240,000	depreciation	1,600,000	0.15
Sanitisation	263,670	cleaning min	155,100	1.7
Utilities	146,250	procedure min	292500	0.5

Particulars	X rays	Ultrasound	CT scan	MRI	Total
Tech labour	73,500	113,100	160,720	101000	448,320
Depreciation	6300	276,500	466,200	851,000	1,600,000
Material	22,600	16,400	23,900	30,900	93,800
Adm	8448	6048	4416	3648	22560
Maintenance	945	41,475	69,930	127650	240,000
Sanitation	44,880	32,130	70,380	116,280	263,670
Utilities	26,400	28,350	34,500	57,000	146,250
	183,073	514,003	830,046	1,287,478
No of procedures	5280	3780	2760	2280
Cost per service	34.67	135.97	300.74	564.68