1. What are the pros and cons of the current one-pool costing system at VMD Medical Imaging Center (MIC)?
2. What are the signs of obsolescence of VMD’s existing costing system? (Provide at least three reasons).
3. Assuming that VMD MIC competitors have an accurate costing system, what are the char- acteristics of jobs (services) that VMD MIC is likely to win vs. lose to their competitors? Provide a graph illustrating the mechanism at play.
4. Assuming that technical complexity is the true driver of overhead costs, what are the char- acteristics of the jobs that VMD MIC will win vs. lose to its competitors? Provide a graph illustrating the mechanism at play.
5. Under what conditions the current costing system might allow VMD MIC to record positive profits?
6. How is the burden rate likely to evolve in the future and why?
7. Provide a a diagram illutrating the following costing systems:
(a) The costing system proposed by Crest, the accountant (b) The costing system proposed by Posh, the consultant
8. What is the main difference between the systems proposed by Crest and Posh? 1
9. Calculate the product cost for each of the four tests in accordance with:
(a) The existing costing system
(b) The costing system proposed by Crest, the accountant
(c) The costing system proposed by Posh, the consultant
10. Consider VMD’s recent investment in the 3D MRI equipment. While this technology allows the Medical Imaging Center to stay at the forefront of technological developments in the field, it is curently underutilized. How would you propose to treat the new equipment from a costing system standpoint?
11. Provide a diagram illustrating your solution.
12. Discuss the pros and cons of your choice.
13. Provide and discuss at least two other ways of treating the new equipment.
For more information on Cost Management read this: https://en.wikipedia.org/wiki/Project_cost_management
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