2. A local hospital has a radiology department. Recently the department has
undertaken the task of looking into related costs. The department takes
37,000 x-rays each year. The X-rays are taken as part of the treatment
protocols for patients from three revenue department: 2000 cardiology
patients who require an average of 8 x-rays each; 4500 orthopedic patients
who each get an average of 4 rays taken during the course of their treatment;
and 1000 oncology patients who have three x rays taken. An X-ray can be
taken from the machine in the laboratory or from portable equipment. 30%
of the cardiology patients require the use of portable equipment while 10%
of the orthopedic patient x rays and 15% of the oncology patients x rays use
the portable equipment. On an average, the number of x rays that have to be
taken does not vary between patients that use the stationary x ray machines
in the radiology laboratory and x rays taken using the portable equipment.
X ray film cost $15 per exposure and developing chemicals cost $2.00 per image.
Annual salaries are $30,000 per year for each of the six technicians who
operate the stationary x ray machine and 35,000 for each of the eight
technicians who operate the portable x ray equipment. Radiology has fixed
overhead costs of $100,000 per year and spends $15,000 per year to
maintain the summary x ray machines and $25,000 to maintain the portable
units.
a. What is the cost per x ray, if process costing method is used?
