You are a management accountant at WCP Management Consultants. You have been approached by Greenwood Medical Centre (GMC).
GMC performs X-rays, ultrasounds, CT scans and MRIs. It has developed a reputation as a top radiology centre in the state. GMC has achieved this status because it constantly re-examines its processes and procedures.
Traditionally, GMC has been using a single organisation-wide overhead allocation rate. The Finance Manager believes that GMC can make better process improvements if it uses more disaggregated cost information. In a recent meeting, he argued. “We have state-of-the-art medical imaging technology. Can`t we have state-of-the-art accounting technology?”