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 belleves 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 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 fomula, 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, 5-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) X-rays Ultrasound CT scan MRI Technician labor Depredaton Materials Indirect costs Total budgeted costs Budgeted cost per service 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.XXX.) (5) Cost driver rate Administration (6) Maintenance Sanitation (8) Utility (9) Ing. Round costs to the nearest whole dollar. Then round the cost per service to the Now calculate the budgeted cost for each service and the budgeted cost per service using activity-based nearest cent) X-rays Ultrasound CT scan MRI Technician labor Depredaton Materials Administration Maintenance Sanitation Utilities 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, O 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 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 cost 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 ways to reduce the activity costs MRI Rathburn's Radiology Center Budgeted Information for the year Ended May 31, 2017 X-rays Ultrasound CT scan Technician labor 5 98,055 $ 145,000 $ 209,320 5 140,000 S Depreciation 160,800 246,000 377,200 716.000 Materials 22,400 16,000 24,000 31,400 Administration Maintenance Sanitation Total 592,385 1,500,000 93,800 18.480 270,000 288,192 134,190 Utilities 281,255 5 407,000 5 610,520 $ 887,400 $ 2,897,047 2,988 4.380 3.168 Total Number of procedures Minutes to clean after each procedure Minutes for each procedure 2,664 30 5 5 20 10 20 15 50 2: Data Table 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 Total cleaning minutes Utilities Total procedure minutes 3: Requirements 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis. 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI I 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. (1) Total technician labor cost (2) Total technician labor cost (3) O Total Indirect costs Total Indirect material costs Total overhead costs Total Indirect costs Total Indirect material costs Total overhead costs per batch per DC 5 per DLS (5) per procedure minute Cost Number of procedures Total quantity of cost driver 0000 Cost Number of procedures Total quantity of cost driver per 5 of depreciation per cleaning minute O per procedure O per procedure minute (8) per procedure minute (9) 0 per procedure minute per 5 of depreciation per cleaning minute per procedure per 5 of depreciation per cleaning minute per procedure 0000 per 5 of depreciation per cleaning minute per procedure MRI). RR Hent of fin Requirements use it mation. Data table Total 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if RRC allocated overhead costs using activity-based costing. 3. Explain how the disaggregation of information could be helpful to RRC'S intention to continuously improve its services. Rathburn's Radiology Center Budgeted Information for the year Ended May 31, 2017 X-rays Ultrasound CT scan MRI Technician labor $ 98,065 $ 145,000 $ 209,320 $ 140,000 $ Depreciation 160,800 246,000 377,200 716,000 Materials 22,400 16,000 24,000 31,400 Administration 592,385 1,500,000 Is the alla 93,800 ble amoy Direct 18,480 Maintenance Print Done Sanitation 270,000 288,192 134,190 Utilities Data table $ 281,265 $ 407,000 $ 610,520 $ 887,400 $ 2,897,047 Total 2,988 4,380 3,168 2,664 umber of procedures Minutes to clean after each procedure Minutes for each procedure 5 5 20 30 10 20 15 50 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 Total cleaning minutes Utilities Total procedure minutes Print Done Print Done