Consider VMD$$s recent investment in the $3$D MRI equipment. While this technology allows the Medical Imagining Center to stay at the forefront of technological developments in the field, it is currently underutilized. How would you propose to treat the new equipment from a costing system standpoint?

Let's assume that the operating data of the new $3$D MRI machine is the following:

$$ Initial Cost $=$ $$5,000,000$

$$ Useful life $=10$ years

$$ Residual value $=0$

$$ Overhead costs $($other than depreciation$)$ per year $=$ $$250,000$

$$ Capacity $=2,500$ hours $/$ year

$$ Current utilization $=500$ hours $/$ year