Riddick'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 believes 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?" EEB (Click the icon to view the budgeted information.) EEB (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 formula, theen 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, $ dollar.) Total indirect costs Total technician labor cost / Budgeted overhead rate 448,320 $ 672,480 1.50 per DL $ 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.) -rays 73500 Technician labor 6300 Depreciation 21900 Materials Indirect costs Total budgeted costs Budgeted cost per service Riddick's Radiology Center Budgeted Information for the year Ended May 31, 2017 Total -ays Ultrasound CT scan MRI $ 73,500 $ 160,720 $ 101,000 $ Technician labor 113,100 $ 448,320 6,300 276,500 Depreciation 466,200 851,000 1,600,000 24,500 31,000 94,200 Materials 21,900 16,800 Administration 22,560 Maintenance 240,000 Sanitation 263,670 146,250 Utilities 101,700 $ 406,400 $ 651,420 $ 983,000 $ 2,815,000 3,780 2,760 2,280 Number of procedures 5,280 Minutes to clean after each procedure 5 5 15 30 Minutes for each procedure 10 15 25 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 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
