Table: Pathos Radiology Center Budgeted Information for the Year Ended May 31, 2022
Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis.
Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if PRC allocated overhead costs using activity-based costing.
Evaluate the differences between the 2 costing models, and assess the value of activity-based costing for management profitability analysis and decision making.
Explain how the disaggregation of information could be helpful to PRC’s intention to continuously improve its services.
Pathos Radiology Center Budgeted Information for the Year Ended May 31, 2022 X-ravs Ultrasound CT Scan MRI Total Technician labor $ 62,000 $101,000 $155,000 $ 103,000 $ 421,000 Depreciation 42,240 256,000 424,960 826,800 1,600,000 Materials 22,600 16,400 23,600 31,500 94,100 Administration 20,000 Maintenance 250,000 Sanitation 252,500 Utilities 151,100 $126,350) $323,300 $603,560 W $217.83 200 Number of procedures 3,342 4,352 2,924 2,482 Minutes to clean after 5 5 15 35 each procedure Minutes for each 5 15 25 40 procedure 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
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