Calculate the product cost for each of the four tests in accordance with: 1.The existing costing system 2.The costing system proposed by Crest, the accountant 3.The costing system proposed by Posh, the consultant

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Exhibit 1 VMD Medical Imaging Center 2015 Summary Financial Results $3,520,018 $1,375,571 Revenues Direct Labor Overhead Total Expenses Profit $1,982,428 $3,357,999 $162,019 Source: Casewriters. Exhibit 2 Calculation of Burden Rate at VMD MIC Overhead Direct Labor = $1,982,428 $1,375,571 144.1167% Source: Casewriters. Exhibit 3 VMD MIC Direct Labor Cost Breakdown by Test Test Direct Labor ($) Projectional Radiographs Fluoroscopies Computerized Axial Tomography (CAT) Scan Magnetic Resonance Imaging (MRI) Scan Total $417,073 $414,047 $270,850 $273,601 $1,375,571 Source: Casewriters. Exhibit 4 Additional Information Required for Cost System Proposed by Accountant A: Breakdown of Overhead Expenses Type of Overhead Cost Direct Labor Related Overhead Equipment Related Overhead Total Overhead Cost $721,392 $1,261,036 $1,982,428 B: Utilization of Equipment by Test Test Projectional Radiographs Fluoroscopies Computerized Axial Tomography (CAT) Scan Magnetic Resonance Imaging (MRI) Scan Total Run Time / Year (Hours) 1,060 1,312 1,394 2,515 6,281 Source: Casewriters. Exhibit 5 Additional Information Required for Cost System Proposed by Consultant Cost $921,793 $339,243 $1,261,036 A: Breakdown of Equipment Related Overhead Type of Overhead Cost High Tech Equipment Related Overhead Low Tech Equipment Related Overhead Total Equipment Related Overhead B: Utilization of High- and Low-Tech Equipment by Test Test High-Tech Utilization (Hours) Projectional Radiographs 268 Fluoroscopies 579 Computerized Axial Tomography (CAT) 819 Scan Magnetic Resonance Imaging (MRI) Scan 2,515 Total 4,181 Low-Tech Utilization (Hours) 792 733 575 0 2,100 Source: Casewriters