Yorkville Radiology Centre (VRC) performs X-rays, ultrasounds, CT scans, and MRIS. YRC has developed a reputation as
Question:
Yorkville Radiology Centre (VRC) performs X-rays, ultrasounds, CT
scans, and MRIS. YRC has developed a reputation as a top radiology centre in the area. YRC has achieved this status because it constantly re-examines its processes and procedures YRC has been using a single, facility-wide overhead allocation rate. The VP of Finance believes that YRC can make better process improvements if it uses more disregated 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:
The following budgeted information is available:
X-RaysUltrasoundCT ScanMRITotal
Technician Labour$61,440$1,05,600$96,000$1,05,000$3,68,040
Depreciation$32,240$2,68,000$4,39,000$8,97,500$16,36,740
Materials$22,080$16,500$24,000$31,250$93,830
Administration$20,610
Maintenance$2,47,320
Sanitation$1,96,180
Utilities$1,34,350
Totals$1,15,760$3,90,100$5,59,000$10,33,750$26,97,070
Number of Procedures 3,840 4,400 3,000 2,500 13,740
Minutes to clean after each proceure 5 5 15 35
Minutes for each procedure 5 15 20 45
Sanitation Minutes 19,200 22,000 45,000 87,500 1,73,700
Procedure minutes 19,200 66,000 60,000 1,12,500 2,57,700
YRC operates at capacity. The proposed allocation bases for overhead are as follows:
Allocation BaseDriver
AdministrationNumber of procedures
Maintenance (including parts)Capital cost of equipment (depreciation)
SanitationTotal cleaning minutes
UtilitiesTotal procedure minutes
1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using the direct technician labour as the cost allocation base. 2. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using activity-based costing (ABC)
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ