1) You are a management accountant at WCP Management Consultants. You have been approached by Greenwood Medical Centre (GMC). GMC performs X-rays, ultrasounds, CT scans and MRIs. It has developed a reputation as a top radiology centre in the state. GMC has achieved this status because it constantly reexamines its processes and procedures. Traditionally, GMC has been using a single organisation-wide overhead allocation rate. The Finance Manager believes that GMC can make better process improvements if it uses more disaggregated cost information. In a recent meeting, he argued. "We have state-of-the-art medical imaging. technology. Can't we have state-of-the-art accounting technology?" GMC has provided you with the following information. Greenwood Medical Centre Budgeted information For the year ended 30 June 2015 Technician labour Depreciation Materials Administration Maintenance X-rays Ultrasoun CT scan MRI d $61 440 $105 600 $96 000 32 240 22 080 268 000 439 000 16 500 24 000 $105 000 897 500 31 250 Total $368 040 1 636 740 93 830 20 610 247 320 Sanitation 196 180 Utilities 134 350 Total $115 760 $390 100 Number of procedures 3840 Minutes to clean after each 5 4400 5 $559 000 3000 15 $1033 750 2500 35 $2 697 070 procedure Minutes for each procedure 5 15 20 45 GMC operates at capacity. The proposed cost-allocation bases for overhead are as follows: Administration Number of procedures Maintenance (including parts) Sanitation Utilities Capital Cost of the Equipment (use depreciation) Total cleaning minutes Total procedure minutes REQUIRED: (A) Calculate the budgeted cost per service for X-rays, Ultrasounds, CT scans and MRIs using direct technician labour costs as the cost-allocation basis. (B) Calculate the budgeted cost per service of X-rays, Ultrasounds, CT scans and MRIs if RRC allocated overhead costs using activity-based costing (ABC). (C) Explain how the disaggregation of information could be helpful to GMC's intention to continuously improve its services. (D)Would you advise GMC to use the traditional overhead allocation method or adopt the ABC method?