National Radiology Center (NRC) provides X-rays, ultrasounds, and computer tomography (CT) scans. NRC has constantly reexamined...
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National Radiology Center (NRC) provides X-rays, ultrasounds, and computer tomography (CT) scans. NRC has constantly reexamined its processes and procedures. NRC has been using a single facility-wide overhead allocation rate. The Chief Financial Officer believes that NRC can make better process improvements if it uses more disaggregated cost information. NRC budgeted information for the year ended May 31, 2019 as follows. Technician labor Depreciation Materials Administration Maintenance Sanitation Utilities Number of procedures Total cleaning minutes Total procedures minutes X-rays Administration Maintenance (including parts) Sanitation Utilities $73,000 42,000 22,600 3,600 28,800 32,400 The proposed allocation bases for overhead are: Ultrasound $133,000 356,000 22,000 4,000 16,000 56,000 CT Scan $145,000 424,000 23,600 2,600 31,200 57,200 Number of procedures Capital cost of the equipment (use depreciation) Total cleaning minutes Total procedures minutes Total $351,000 822,000 68,200 35,000 225,000 212,500 166,300 Total 10,200 76,000 145,600 Required: 1. Calculate the budgeted cost per procedures for X-rays, ultrasounds, and CT scans services using direct technician labor costs as the allocation base 2. Calculate the budgeted cost per procedures for X-rays, ultrasounds, CT scans services if NRC allocated overhead costs using activity-based costing National Radiology Center (NRC) provides X-rays, ultrasounds, and computer tomography (CT) scans. NRC has constantly reexamined its processes and procedures. NRC has been using a single facility-wide overhead allocation rate. The Chief Financial Officer believes that NRC can make better process improvements if it uses more disaggregated cost information. NRC budgeted information for the year ended May 31, 2019 as follows. Technician labor Depreciation Materials Administration Maintenance Sanitation Utilities Number of procedures Total cleaning minutes Total procedures minutes X-rays Administration Maintenance (including parts) Sanitation Utilities $73,000 42,000 22,600 3,600 28,800 32,400 The proposed allocation bases for overhead are: Ultrasound $133,000 356,000 22,000 4,000 16,000 56,000 CT Scan $145,000 424,000 23,600 2,600 31,200 57,200 Number of procedures Capital cost of the equipment (use depreciation) Total cleaning minutes Total procedures minutes Total $351,000 822,000 68,200 35,000 225,000 212,500 166,300 Total 10,200 76,000 145,600 Required: 1. Calculate the budgeted cost per procedures for X-rays, ultrasounds, and CT scans services using direct technician labor costs as the allocation base 2. Calculate the budgeted cost per procedures for X-rays, ultrasounds, CT scans services if NRC allocated overhead costs using activity-based costing
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