Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Operation Management Expert

Dr. Sherry Bird is employed by the Dental Associates. Dental Associates recently installed the computerized job-order costing system to help monitor the cost of its services. All patients are treated as a job and assigned a job number when he or she checks in with the receptionist. Receptionist-bookkeeper notes the time the patient enters the treatment area and when 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.) Direct labour time assigned to the dentist is 50 percent of the patient hours. (The dentist typically splits her time between two patients.)
Chart filled out by dental assistant provides extra data that is entered into the computer. For ex, the chart contains service codes which identify the nature of the treatment, like whether the patient received a crown, a filling, or a root canal. Chart not only identifies type of service but its level as well. Like, 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 the patient consist of materials, labour, and overhead. 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 the file and accessed to give the necessary cost information. Overhead is on the basis of patient hours. Rate used by Dental Associates is $20 per patient hour. Direct labour cost is also find outd using patient hours and the wage rates of the direct labourers. Dr. Bird is paid the average of $36 per hour for her services. Dental assistants are paid an average of $6 per hour. Given the treatment time, software program find outs and assigns the labour cost for the dentist and her assistant; overhead cost is also assigned using the treatment time and the overhead rate.
Overhead rate does not include a charge for any X-rays. 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 labour 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:

problem1) 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?

problem2) Assume that the patient time and associated patient charges are given for the following fillings:

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

find out 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 patient? Is it fair to the dental corporation?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M9622

Have any Question? 


Related Questions in Operation Management

Explain what bait and switch is and why it is an example of

Explain what bait and switch is and why it is an example of deceptive pricing. Have you ever been a victim of this practice? 250 words please

Discussion video review - crew resource management crmcrew

Discussion: Video Review - Crew Resource Management (CRM) Crew Resource Management - Human Factors and their relationship with equipment, procedures, people and the environment. Please go to the following video - Crew Re ...

Assignment-1identify the four types of layouts and their

Assignment- 1. Identify the four types of layouts and their characteristics. 2. The manufacturing engineers at Suny Manufacturing were working on a new remote- controlled toy Monster Truck. They hired a production consul ...

There are three imperative steps that need to be taken the

There are three imperative steps that need to be taken. The first is a strong commitment by leadership to this very high level of safety and quality. The leadership must set the goal and example for everyone in order to ...

Analyze the major differences between marriott

Analyze the major differences between Marriott international and Starwood Hotels and Resorts before and after the merger. Show differences in Chart form.

Given that laws and regulations have major importance in

Given that laws and regulations have major importance in conducting the staffing process, describe the legal obligations of an employer during recruitment, selection, and employment. Key Concept: Outline the main legisla ...

What is global mindset how do you train global mindset what

What is global mindset? How do you train global mindset? (What language you use..etc) Please answer these questions.

What does the term bullying in the workplace mean are

What does the term "bullying" in the workplace mean? Are there layers or dimensions to the term. Please be explicit. Have employees filed lawsuits & other formal complaints in this area? Please give examples & also expla ...

Do you think that a distinction should be drawn between

Do you think that a distinction should be drawn between religion and the other classes protected by the 1964 CRA, on grounds of mutability? The argument can be made that one could at hypothetically change an attribute su ...

1 explain what makes negotiations successful discuss in

1. Explain what makes negotiations successful. Discuss in your own words. 2. List and describe the five key steps that a successful organization should take to handle conflict. In your own words 3. Explain the two key pr ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro