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Constantly reexammes its processes and procedures. Kro tras peen using a single, facility-wide overeau allocationTate. The vice president of manice pelieves that kro call make better process improvements in it uses more disaggregated cost momation. She says, "We have state-of-the-art medical imaging technology. Can't we have state-of-the-art accounting technology?" (Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements. Data table Rathburn's Radiology Center Budgeted Information for the year Ended May 31, 2017 Technician labor Depreciation Materials Administration Maintenance Sanitation Utilities Total Number of procedures Minutes to clean after each procedure Minutes for each procedure X-rays Ultrasound CT scan $ 98,065 $ 160,800 22,400 145,000 $ 246,000 16,000 MRI 209,320 $ 140,000 $ 377,200 716,000 Total 592,385 1,500,000 24,000 31,400 93,800 18,480 270,000 288,192 134,190 $ 281,265 $ 407,000 $ 610,520 $ 887,400 $ 2,897,047 2,988 4,380 3,168 5 5 10 20 8 25 20 2,664 30 15 50 Print Done Data table Is the a ble am RRC operates at capacity. The proposed allocation bases for overhead are: Administration Number of procedures Maintenance (including parts) Capital cost of the equipment (use Depreciation) Sanitation Utilities Total cleaning minutes Total procedure minutes ect Print Done Clear all Check answer 6. Rathburn's Radiology Center (RRC) performs X-rays, ultrasounds, computer tomography (CT) scans, and magnetic resonance imaging (MRI). RRC has developed a reputation as a top radiology center in the state. 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 vice president 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?" 1(Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis. Start by calculating the budgeted overhead rate for total indirect costs based on total labor. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to two decimal places, X.XX. Abbreviations used: DC = Direct cost, DL = Direct labor, $ = dollar.) (1) (2) Budgeted overhead rate (3) Now calculate the total budgeted costs for each service and the budgeted cost per each service using direct technician labor costs as the allocation basis. (Round the budgeted cost per service to the nearest cent.) Technician labor Depreciation Materials Indirect costs Total budgeted costs X-rays Ultrasound CT scan MRI Budgeted cost per service Requirement 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if RRC allocated overhead costs using activity-based costing. Begin by calculating the cost driver rate per activity. (Round the answers to five decimal places, "X.XXXXX".) Administration Maintenance Sanitation Utility (4) (5) Cost driver rate (6) (7) (8) |(9) Now calculate the budgeted cost for each service and the budgeted cost per service using activity-based costing. (Round costs to the nearest whole dollar. Then round the cost per service to the nearest cent.) X-rays Ultrasound CT scan MRI Technician labor Depreciation Materials Administration Maintenance Sanitation Utilities Print Total budgeted costs Budgeted cost per service Requirement 3. Explain how the disaggregation of information could be helpful to RRC's intention to continuously improve its services. Using the disaggregated activity-based costing data, A. Managers can see that the X-ray actually costs substantially more than the MRI, ultrasounds, and CT scans. This is why the number of procedures for this method of activity is the lowest for each group of activity. B. Managers can see that the ultrasounds actually cost the same as the other group of activities. Managers should feel indifferent in trying to obtain ways to continuously improve in this area. C. Managers can see that the CT scans are extremely more costly than the x-rays, ultrasounds, or MRI's. This causes managers to focus on ways of reducing the number of procedures so costs can stay at a minimum. D. Managers can see that the MRI actually costs substantially more and x-rays, ultrasounds, and CT scans substantially less than the traditional system indicated. Managers should examine the use of maintenance and sanitation activities to search for ways to reduce the activity costs. 1: Data Table Rathburn's Radiology Center Budgeted Information for the year Ended May 31, 2017 Technician labor Depreciation Materials Administration Maintenance Sanitation $ X-rays 98,065 $ 160,800 22,400 Ultrasound CT scan 145,000 $ 246,000 16,000 MRI 209,320 $140,000 $ 377,200 716,000 24,000 31,400 Total 592,385 1,500,000 93,800 18,480 270,000 288,192 134,190 Utilities 281,265 $ 407,000 $ Total Number of procedures 2,988 4,380 610,520 $ 887,400 $ 2,897,047 3,168 2,664 X-rays Ultrasound CT scan MRI Total Print Technician labor $ 98,065 $ 145,000 $ 209,320 $ 140,000 $ Depreciation 160,800 246,000 377,200 Materials Administration 22,400 16,000 24,000 716,000 31,400 592,385 1,500,000 93,800 18,480 Maintenance 270,000 Sanitation 288,192 134,190 Utilities Total Number of procedures Minutes to clean after each procedure Minutes for each procedure $ 281,265 $ 407,000 $ 610,520 $ 887,400 $ 2,897,047 2,988 4,380 3,168 2,664 5 10 20 52 20 30 15 50 2: Data Table RRC operates at capacity. The proposed allocation bases for overhead are: Administration Maintenance (including parts) Sanitation Number of procedures Capital cost of the equipment (use Depreciation) Total cleaning minutes Utilities 3: Requirements Total procedure minutes 1. 2. 3. 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 RRC allocated overhead costs using activity-based costing. Explain how the disaggregation of information could be helpful to RRC's intention to continuously improve its services. OOOO Total technician labor cost Total technician labor cost Total indirect costs Total indirect material costs Total overhead costs Total indirect costs Total indirect material costs Total overhead costs O per batch O per DC $ O per DL $ Cost Number of procedures Total quantity of cost driver O per procedure minute O per $ of depreciation O per cleaning minute O per procedure OOOO O per procedure minute O per procedure minute (9) O per $ of depreciation per cleaning minute per procedure per $ of depreciation per cleaning minute O per procedure O per $ of depreciation O per cleaning minute O per procedure Cost Number of procedures Total quantity of cost driver O per procedure minute

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