The Northshire Hospital Trust operates two types of specialist X-ray scanning machines, XR1 and XR50. Details for the next period are estimated as follows:

A brain scan is normally carried out on machine type XR1: this task uses special X-ray plates costing £40 each and takes four hours of machine time. Because of the nature of the process, around 10 per cent of the scans produce blurred and therefore useless results.
Required:
(a) Calculate the cost of a satisfactory brain scan on machine type XR1. (7 marks)
(b) Brain scans can also be done on machine type XR50 and would take only 1.8 hours per scan with a reduced reject rate of 6 per cent. However, the cost of the X-ray plates would be £55 per scan.
Required:
Advise which type should be used, assuming sufficient capacity is available on both types of machine.

Transcribed Image Text:

Machine XR1 XR50 Running hours 1100 2000 Variable running costs (excluding plates) Fixed costs 27 500 20000 64000 97500