Question:
Analysis of costs by behaviour for decision-making
The Northshire Hospital Trust operates two types of specialist X-ray scanning machines, XR1 and XR50. Details for the next period are estimated as follows:
|
Machine
|
XR1
|
XR50
|
|
Running hours
|
1 100
|
2 000
|
|
(£)
|
(£)
|
|
Variable running costs (excluding plates)
|
27 500
|
64 000
|
|
Fixed costs
|
20 000
|
97 500
|
A brain scan is normally carried out on machine type XR1: this task uses special X-ray plates costing £40 each and takes four hours of machine time. Because of the nature of the process, around 10% of the scans produce blurred and therefore useless results.
Required:
(a) Calculate the cost of a satisfactory brain scan on machine type XR1.
(b) Brain scans can also be done on machine type )CR50 and would take only 1.8 hours per scan with a reduced reject rate of 6%. However, the cost of the X-ray plates would be £55 per scan.
Required:
Advise which type should be used, assuming sufficient capacity is available on both types of machine.