Technicians at Coastal Radiology Queensland (CRQ) conduct X-rays, ultrasounds, computed- tomography (CT) scans and magnetic resonance...
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Technicians at Coastal Radiology Queensland (CRQ) conduct X-rays, ultrasounds, computed- tomography (CT) scans and magnetic resonance imaging (MRI). The management accountant has gathered the following information in preparation for the budget for the year to 30 June 2019. The costing system that management is using at CRQ has one cost driver, technicians' remuneration, and costs are calculated per procedure. The management accountant is not sure that the system is reporting sufficiently accurate costs on which to base charges or to monitor performance. X-rays Ultrasounds ст MRI Indirect costs Technicians' remuneration Depreciation 120 000 55 000 180 000 45 000 scans 220 000 250 000 865 000 1 650 000 Consumables 41 500 31 500 42 000 57 000 380 000 565 000 454 500 247 000 Administration Maintenance Cleaning Utilities Number of procedures Duration of procedure in minutes Post-procedure cleaning time in minutes 3520 25 3720 2780 20 10 4535 15 5 5 15 Required 1. Apply the costing system in use at CRQ to calculate a cost per procedure. 2. Evaluate the costing system as a basis for charging patients and for monitoring performance. 3. Recommend a costing system that is capable of addressing issues raised in your evaluation. Note: apply the system that you have recommended. 4. There's no reason for me to get excited about the choice between the weighted-average and FIFO methods in my process-costing system. I have long-term contracts with my materials suppliers at fixed prices. Do you agree with this statement made by a plant controller? Explain your answer. Technicians at Coastal Radiology Queensland (CRQ) conduct X-rays, ultrasounds, computed- tomography (CT) scans and magnetic resonance imaging (MRI). The management accountant has gathered the following information in preparation for the budget for the year to 30 June 2019. The costing system that management is using at CRQ has one cost driver, technicians' remuneration, and costs are calculated per procedure. The management accountant is not sure that the system is reporting sufficiently accurate costs on which to base charges or to monitor performance. X-rays Ultrasounds ст MRI Indirect costs Technicians' remuneration Depreciation 120 000 55 000 180 000 45 000 scans 220 000 250 000 865 000 1 650 000 Consumables 41 500 31 500 42 000 57 000 380 000 565 000 454 500 247 000 Administration Maintenance Cleaning Utilities Number of procedures Duration of procedure in minutes Post-procedure cleaning time in minutes 3520 25 3720 2780 20 10 4535 15 5 5 15 Required 1. Apply the costing system in use at CRQ to calculate a cost per procedure. 2. Evaluate the costing system as a basis for charging patients and for monitoring performance. 3. Recommend a costing system that is capable of addressing issues raised in your evaluation. Note: apply the system that you have recommended. 4. There's no reason for me to get excited about the choice between the weighted-average and FIFO methods in my process-costing system. I have long-term contracts with my materials suppliers at fixed prices. Do you agree with this statement made by a plant controller? Explain your answer.
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