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.