Rowley's Radiology Centre (RRC) performs X-rays, ultrasounds, CT scans, and MRIs. RRC has developed a reputation as a top radiology centre in the area. 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 VP 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?"

The following budgeted information is available.

Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRIs using direct technician labour costs as the allocation base.

Determine the formula to calculate the overhead costs allocated to each service. Next, calculate the indirect costs allocated to each service. (Do not round until the final amount; then round the costs allocated to the nearest whole number.)

formula to calculate the overhead costs allocated to each service. Next, calculate the indirect costs allocated to each service. (Do not round until the final amount; then round the costs allocated to the nearest whole number.)

Budgeted overhead rate

x

(

/

) =

Indirect costs allocated to service

X-Rays

x

(

/

) =

Ultrasound

x

(

/

) =

CT Scan

x

(

/

) =

MRI

x

(

/

) =

Now calculate the total budgeted costs for each service using direct technician labour costs as the allocation basis. Then, calculate the budgeted cost per service. (Round the budgeted cost per service to the nearest cent.)

	X-Rays	Ultrasound	CT Scan	MRI
Technician labour	$63,500	$104,000	$96,500	$107,000
Depreciation	33,000	273,000	436,000	895,000
Materials	22,600	16,300	23,700	30,900
Indirect costs
Total budgeted costs

Budgeted cost per service