User Account

All Pages

Cost management, Project Management

Assignment Help:
Dr. Sherry Bird is employed by Dental Associates. Dental Associates recently installed a computerized job-order costing system to help monitor the cost of its services. Each patient is treated as a job and assigned a job number when he or she checks in with the receptionist. The receptionist-bookkeeper notes the time the patient enters the treatment area and when the patient leaves the area. This difference between the entry and exit times is the number of patient hours used and the direct labor time assigned to the dental assistant. (A dental assistant is constantly with the patient.) The direct labor time assigned to the dentist is 50 percent of the patient hours. (The dentist typically splits her time between two patients.)
The chart filled out by the dental assistant provides additional data that is entered into the computer. For example, the chart contains service codes that identify the nature of the treatment, such as whether the patient received a crown, a filling, or a root canal. The chart not only identifies the type of service but its level as well. For example, if a patient receives a filling, the dental assistant indicates (by a service-level code) whether the filling was one, two, three, or four surfaces. The service and service-level codes are used to determine the rate to be charged to the patient. The costs of providing different services and their levels also vary.
Costs assignable to a patient consist of materials, labor, and overhead. The types of materials used—and the quantity—are identified by the assistant and entered into the computer by the bookkeeper. Material prices are kept on file and accessed to provide the necessary cost information. Overhead is on the basis of patient hours. The rate used by Dental Associates is $20 per patient hour. Direct labor cost is also computed using patient hours and the wage rates of the direct laborers. Dr. Bird is paid an average of $36 per hour for her services. Dental assistants are paid an average of $6 per hour. Given the treatment time, the software program calculates and assigns the labor cost for the dentist and her assistant; overhead cost is also assigned using the treatment time and the overhead rate.
The overhead rate does not include a charge for any X-rays. The X-Ray Department is separate from dental services; X-rays are billed and costed separately. The cost of an X-ray is $3.50 per film; the patient is charged $5 per film. If cleaning services are required, cleaning labor costs $9 per patient hour.
Glen Johnson, a patient (Job 267), spent 30 minutes in the treatment area and had a two-surface filling. He received two Novocaine shots and used three ampules of amalgam. The cost of the shots was $1. The cost of the amalgam was $3. Other direct materials used are insignificant in amount and are included in the overhead rate. The rate charged to the patient for a two-surface filling is $45. One X-ray was taken.

Required:
1. Prepare a job-order cost sheet for Glen Johnson. What is the cost for providing a two-surface filling? What is the gross profit earned? Is the X-ray a direct cost of the service? Why are the X-rays costed separately from the overhead cost assignment?
2. Suppose that the patient time and associated patient charges are given for the following fillings:

1-Surface 2-Surface 3-Surface 4-Surface
Time 20 min 30 min 40 min 50 min
Charge $35 $45 $55 $65

Compute the cost for each filling and the gross profit for each type of filling. Assume that the cost of Novocaine is $1 for all fillings. Ampules of amalgam start at two and increase by one for each additional surface. Assume also that only one X-ray film is needed for all four cases. Does the increase in billing rate appear to be fair to the patient? Is it fair to the dental corporation?

Related Discussions:- Cost management

Processes as production systems, Processes as Production Systems A ...

Processes as Production Systems A production system refers to how an organization   organizes material flow using different process technologies. There are five major types

Flow charts, Flow Charts Flow chart is the most familiar tool to unders...

Flow Charts Flow chart is the most familiar tool to understand processes. It is used to identify a sequence of events in a process. Using flow charts require six deliberate act

Formulation of production specification, Specification is an important qua...

Specification is an important quality document for the product because it is here that quality fo the product as a whole is defined in precise technical terms. Although the use

Negotiation, reasons of negotiation

reasons of negotiation

Tool of total quality improvement, Question: As the Managing Director o...

Question: As the Managing Director of your organization, you have been analyzing other institutions that you regard as competitors. Extrapolating your current position up to t

Advantages of iso standards, ISO standards give tremendous advantages to ...

ISO standards give tremendous advantages to those holding their certification. Some of these advantages are briefly discussed below for different categories of groups ins

Advantages of fms, Advantages of FMS Flexible manufacturing system...

Advantages of FMS Flexible manufacturing systems are regarded as one of the most efficient methods to employ in reducing or eliminating problems in manufacturing industrie

Cost management, Dr. Sherry Bird is employed by Dental Associates. Dental A...

Dr. Sherry Bird is employed by Dental Associates. Dental Associates recently installed a computerized job-order costing system to help monitor the cost of its services. Each patien

Elaborate the project communication management processes, Question : (a...

Question : (a) Project communication plan involves the generation and distribution of project documentation among stakeholders and is considered as the driver of the project co

Discuss the sources of national competitive advantage, Porter's Diamond is ...

Porter's Diamond is a useful framework that can help an organisation in identifying the extent to which it can build on home based national advantages to create competitive benefit

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd