Reston's Radiology Centre (RRC) performs X-rays, ultrasounds, CT scans, and MRIs. RRC has developed a reputation...

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Reston's Radiology Centre (RRC) performs X-rays, ultrasounds, CT scans, and MRIs. RRC has developed a reputation as a top radiology centre in the area. 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 VP 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?" The following budgeted information is available. (Click the icon to view the budgeted information.) i (Click the icon to view additional information.) Required Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using direct technician labour costs as the allocation base. Determine the formula to calculate the overhead costs allocated to each service. Next, calculate the indirect costs allocated to each service. (Do not round until the final amount; then round the costs allocated to the nearest whole number.) X Budgeted overhead rate Indirect costs allocated to service Budgeted information Reston's Radiology Centre Budgeted Information For the Year Ending May 30 X-Rays Ultrasound CT Scan MRI Total Technician labour $ 63,500 $ 104,000 $ 96,000 $ 102,000 $ 365,500 Depreciation 32,100 273,000 442,000 899,000 1,646,100 Materials Administration Maintenance Sanitation 22,600 16,500 24,300 31,100 94,500 18,000 245,000 198,000 134.000 Budgeted information DepreciativII Materials Administration Maintenance Sanitation Utilities Totals 32,100 213,000 442,UUU , 1,040, 100 22,600 16,500 24,300 31,100 94,500 18,000 245,000 198,000 134,000 $ 118,200 $ 393,500 $ 562,300 $ 1,032,100 $ 2,701,100 Number of procedures 3,800 4,400 2,800 2,600 Minutes to clean after each procedure 5 Minutes for each procedure 5 120 220 589 35 50 ecause it constantly reexamines its processes and procedures. RRC has been using a single, facility-wide overhead Additional information RRC operates at capacity. The proposed allocation bases for overhead are as follows: Administration Number of procedures Maintenance (including parts) Capital cost of the equipment (depreciation) Sanitation Utilities Total cleaning minutes Total procedure minutes Print Done t Required 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using direct technician labour as the cost allocation base. 2. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs if RRC allocated overhead costs using ABC. 3. Explain how the disaggregation of information could be helpful to RRC's intention to continuously improve its services. Reston's Radiology Centre (RRC) performs X-rays, ultrasounds, CT scans, and MRIs. RRC has developed a reputation as a top radiology centre in the area. 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 VP 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?" The following budgeted information is available. (Click the icon to view the budgeted information.) i (Click the icon to view additional information.) Required Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using direct technician labour costs as the allocation base. Determine the formula to calculate the overhead costs allocated to each service. Next, calculate the indirect costs allocated to each service. (Do not round until the final amount; then round the costs allocated to the nearest whole number.) X Budgeted overhead rate Indirect costs allocated to service Budgeted information Reston's Radiology Centre Budgeted Information For the Year Ending May 30 X-Rays Ultrasound CT Scan MRI Total Technician labour $ 63,500 $ 104,000 $ 96,000 $ 102,000 $ 365,500 Depreciation 32,100 273,000 442,000 899,000 1,646,100 Materials Administration Maintenance Sanitation 22,600 16,500 24,300 31,100 94,500 18,000 245,000 198,000 134.000 Budgeted information DepreciativII Materials Administration Maintenance Sanitation Utilities Totals 32,100 213,000 442,UUU , 1,040, 100 22,600 16,500 24,300 31,100 94,500 18,000 245,000 198,000 134,000 $ 118,200 $ 393,500 $ 562,300 $ 1,032,100 $ 2,701,100 Number of procedures 3,800 4,400 2,800 2,600 Minutes to clean after each procedure 5 Minutes for each procedure 5 120 220 589 35 50 ecause it constantly reexamines its processes and procedures. RRC has been using a single, facility-wide overhead Additional information RRC operates at capacity. The proposed allocation bases for overhead are as follows: Administration Number of procedures Maintenance (including parts) Capital cost of the equipment (depreciation) Sanitation Utilities Total cleaning minutes Total procedure minutes Print Done t Required 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using direct technician labour as the cost allocation base. 2. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs if RRC allocated overhead costs using ABC. 3. Explain how the disaggregation of information could be helpful to RRC's intention to continuously improve its services.