Assignment Part A QUESTION 1 (50 Marks) 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 re- examines 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 X-rays Ultrasoun CT scan MRI Total Technician labour $61 440 $105 600 $96 000 $105 000 $368 040 Depreciation 32 240 268 000 439 000 897 500 1 636 740 Materials 22 080 16 500 24 000 31 250 93 830 Administration 20 610 Maintenance 247 320 Sanitation 196 180 Utilities 134 350 Total $1 15 760 $390 100 $559 000 $1 033 750 $2 697 070 Number of procedures 3840 4400 3000 2500 Minutes to clean after each 5 5 15 35 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) Capital Cost of the Equipment (use depreciation) Sanitation Total cleaning minutes Utilities Total procedure minutes