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National Radiology Center (NRC) provides X-rays, ultrasounds, and computer tomography (CT) scans. NRC has constantly reexamined its processes and procedures. NRC has been using a
National Radiology Center (NRC) provides X-rays, ultrasounds, and computer tomography (CT) scans. NRC has constantly reexamined its processes and procedures. NRC has been using a single facility-wide overhead allocation rate. The Chief Financial Officer believes that NRC can make better process improvements if it uses more disaggregated cost information. NRC budgeted information for the year ended May 31, 2019 as follows. X-rays Ultrasound CT Scan Total Technician labor $73,000 $133,000 $145,000 $351,000 Depreciation 42,000 356,000 424,000 822,000 Materials 22,600 22,000 23,600 68,200 Administration 35,000 Maintenance 225,000 Sanitation 212,500 Utilities 166,300 Total Number of procedures 3,600 4,000 2,600 10,200 Total cleaning minutes 28,800 16,000 31,200 76,000 Total procedures minutes 32,400 56,000 57,200 145,600 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 procedures minutes Required: 1. Calculate the budgeted cost per procedures for X-rays, ultrasounds, and CT scans services using direct technician labor costs as the allocation base 2. Calculate the budgeted cost per procedures for X-rays, ultrasounds, CT scans services if NRC allocated overhead costs using activity-based costing
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