Reference no: EM132536492

The Northshire Hospital Trust operates twoperiod typesare of estimated specialist as X-ray scanning machines, XR1 and XR50. Details for the next follows:

Machine                                                                                       XR1            XR50

Running hours                                                           1100 (£)        2000 (£)

Variable running costs (excluding plates)                           275,00             20,000

Fixed costs                                                              640,00               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:

Question (a) Calculate the cost of a satisfactory brain scan on machine type XR1.

Question (b) Brain sca ns can als o be done on ma chine type X R50 and would take on ly 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.

Advise which type should be used, assuming sufficient capacity is available on both types of machine.