Pathos Radiology Center (PRC) performs X-rays, ultrasounds, computer tomography (CT) scans, and magnetic resonance imaging (MRI). PRC has developed a reputation as a top radiology center in the state. It has achieved this status because it constantly re-examines its processes and procedures. It has been using single, facility wide overhead allocation rate. The Vice President of Finance believes that PRC can make better process improvements if it uses more disaggregated cost information. She says "We have a state-of-the-art medical imaging technology. Can't we have state-of-the-art accounting technology?" Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis.

Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if PRC allocated overhead costs using activity-based costing.

Evaluate the differences between the 2 costing models, and assess the value of activity-based costing for management profitability analysis and decision making.

Explain how disaggregation of information could be helpful to PRC's intention to continuously improve its service.