Question

Riddick'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?" Click the icon to view the budgeted information.) (Click the icon to view additional information.) Read the requirements Requirement 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI I 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.XXXX".) Cost Total quanlity of cost driver Cost driver rate Administration $ 22,560 + 14,100 = S 1.60 per procedure Maintenance 240,000 - 1,600,000 = S 0.15 per $ of depreciation Sanitation 263,670 - 155,100 = S 1.70 per cleaning minute Utility 146,250 + 292,500 = $ $ 0.50 per procedure minute 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 S Technician labor Depreciation 73,500 6,300 22,600 8.448 Materials Administration Maintenance Sanitation 945 Utilities Total budgeted costs Enter any number in the edit fields and then click Check Answer. ? 4 parts 4 Clear All remaining Check Answer

Answer 1

Requirement 2- Budgeted cost of Xrys using ABC
	Cost	Cost driver	Rate
Administration	22560	14100	1.6
Maintainance	240000	1600000	0.15
Sanitattion	263670	55	4794	per minute
Utility	146250	100	1462.5	per minute
Budgeted cost for each service
Labour	73500
Depreciation	6300
Material	22600
Administration	8448	(5280*1.6)
Maintainance	945
Sanitattion	23970
Utility	14625
Total cost	150388
Requirement 1- Budgeted cost of Xrays using allocation basis
Predetermined overhead rate= Total indirect cost/technician labour cost
672480/448320= $1.5
Budgeted cost for each service
	Xray	Ultrasound	CT scan	MRI
Labour	73500	113100	160720	101000
Depreciation	6300	276500	466200	851000
Material	22600	16400	23900	30900
Indirect cost	110250	169650	241080	151500
Total cost	212650	575650	891900	1134400