Raynham'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 technol- ogy. Can't we have state-of-the-art accounting technology?" Raynham's Radiology Center Budgeted Information for the Year Ended May 31, 2017 X-rays Ultrasound CT Scan $101,000 MRI Total Technician labor Depreciation $155,000 $ 103,000 $ 421,000 $ 62,000 42,240 22,600 256,000 424,960 23,600 876,800 31,500 1,600,000 94,100 20,000 250,000 252,500 151,100 $2,788,700 Materials 16,400 Administration Maintenance Sanitation Utilities $126,840 3,842 $373,400 4,352 $603,560 $1,011,300 2,924 15 Number of procedures Minutes to clean after each procedure Minutes for each procedure 2,482 35 15 25 40 RRC operates at capacity. The proposed allocation bases for overhead are: Number of procedures Administration Maintenance (including parts) Capital cost of the equipment (use Depreciation) Total cleaning minutes Total procedure minutes Sanitation Utilities
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Q.Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis.
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