IM2.3 Intermediate: Analysis of costs by behaviour for decision-making. The Northshire Hospital Trust operates two types of specialist X-ray scanning machine, XR1 and XR50. Details for the next period are estimated as follows: Machine XR1 XR50 Running hours 1100 2000 Variable running costs excluding plates) 27500 64000 Fixed costs 20000 97500 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 8 marks) CIMA Stage 1 Cost Accounting