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

1 how will the affordable care act influence demand and

1. How will the Affordable Care Act influence demand and what tools could help analyze and predict trends? 2. How will the Affordable Care Act influence supply, and what measures can you implement to assess market trends ...

1 what is the penalty for violating the paternity leave

1. What is the penalty for violating the Paternity Leave Act? 2. What is Parental Leave and who may avail thereof? 3. Should salary-related benefits (i.e. cash equivalent of unused vacation and sick leave credits, overti ...

Multiple choice questions 1 the service sector makes up

Multiple Choice Questions 1. The service sector makes up approximately what percentage of all jobs in the United States? a. 12% b. 40% c. 66% d. 79% e. 90% 2. Which is not true regarding differences between goods and ser ...

Livechat1 what is a hyptohesislivechat2 why is a business

LiveChat1: What is a hyptohesis? LiveChat2: Why is a business review so important? 100-150 word response

Based on the knowledge you have gained through the readings

Based on the knowledge you have gained through the readings in this module, answer the Module Review Questions listed below. These questions were chosen to demonstrate your understanding and help you assess your progress ...

Consider the drug-free workplace act and the protections

Consider the Drug-Free Workplace Act and the protections afforded under the Fourth Amendment of the U.S. Constitution. What rationale, if any, should be allowed grounds for any search (drug testing) of a person without c ...

In hospitals errors are common during all steps of the

In hospitals, errors are common during all steps of the medication-use process and the process of procuring the drug, prescribing, dispensing, administering, and monitoring the patient’s response. As per recent study, be ...

An operation consists of 2 steps the first step has a

An operation consists of 2 steps. The first step has a reliability of 0.75. The second step has a reliability of 0.91. What is the probability that this system will fail? Express as a percentage with one decimal place. D ...

1 which of the following isare primary purposed of a

1. Which of the following is/are primary purposed of a professional strategic financial management function in an organization? a. make sure that there are sufficient capital funds to support strategies b. make sure that ...

Discussion problems and difficulties with air travel

Discussion: Problems and Difficulties with Air Travel Discussion Board is an integral part of your learning in this course. You are encouraged and expected to participate in online discussions. Share an experience you ha ...

  • 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