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Activity Based Costing for RAD Radiology Center

RAD Radiology Center performs X-Rays, Ultrasounds, CT Scans, and MRI,s. They can track the direct labor and materials for each procedure fairly easily but they are having difficulties allocating the costs associated with the administration, maintenance, sanitation, and utilities. They currently divide the overhead evenlt between the procedures.

Complete the table below and calculate the cost per procedure using the current method of dividing costs evenly.

X-Rays Ultra CT Scan MRI Total
Technician Labor $60,000 $110,000 $95,000 $110,000
Depreciation $30,000 $280,000 $450,000 $900,000
Materials $20,000 $25,000 $25,000 $30,000
Admin $40,000
Maintenance $240,000
Sanitation $200,000
Utilities $120,000
Total
#of procedures 400 4,500 3,000 2,500
Cost per procedure

Additional information

x-rays ultra Ct Scan MRI
Mins to clean after each procedure 5 5 15 35
Mins for each procedure 5 15 20 45

Complete the table using the number of procedures to allocate Administration Costs, depreciation costs to allocate maintenance costs, total cleaning time to allocate sanitaion and total procedure minutes to allocate utilities

x-rays Ultra Ct Scan MRI total
Technician Labor $60,000 $110,000 $95,000 $110,000
Depreciation $30,000 $280,000 $450,000 $900,000
Materials $20,000 $15,000 $25,000 $30,000
Administartion $40,000
Maintenance $240,000
Sanitation $200,000
Utilities $120,000
Total
# of procedures
Cost per procedure

Please show work..

Solution Preview

Your tutorial is in Excel so you have a template for future problems like this. The ...

Solution Summary

Your tutorial is in Excel so you have a template for future problems like this. The yellow cells are computations and so you can click in the cells and see the calculations. I have shown the "rates" for each allocated pool but there was rounding so I didn't use the rates seen (just let Excel compute the actual amounts without rounding).

$2.19