MANAGERIAL ACCOUNTIN
Report on a case study : Realizing The Dream – Decis
Prepared by:
IBRAHIM AMMAR ALDULAIMI
MN:P106967
Supervised by: Prof. Dr. AMIZAWATI BT. M
UKM /2021/EPA6214
AL ACCOUNTING
The Dream – Decision-Making in Action
repared by:
MMAR ALDULAIMI
N:P106967
AMIZAWATI BT. MOHD AMIR
2021/EPA6214
Identify and compute the various types of cost for the company according to cost behavior. Determine
Lab service petients 120 11.25 1350
scan sevices petients 180 9 1620
Types Fixed cost per Variable cost Variable cost
Consumables
A4 paper 5
Alcohol 2.5
Bandages 7.5
Cotton 2.5
Envelopes 6
Gel 1.25 225
Gloves 30
Reagents 1.25 150
Syringes 0.125 15
Test kits 1.25 150
Test tubes 0.31 37.2
Thermal print paper 2.5 450
Tissues 5
Toners 16.666
total 75.166 6.685 1027.2
Depreciation expenses:
Computer and Printer 15
Furniture and Fittings 21
Laboratory Equipment 236.667
Scan Equipment 150
total 422.667
Salaries
Ultrasonographers 0.54 97.2
Lab technicians 400
Adminstrative 125
total 525 0.54
Rent,Utilities,Janitorial
40%
total 1022.833 7.225 1124.4
sales LAB 810 CM L
sales SCAN 972 CM S
ording to cost behavior. Determine the monthly fixed and variable costs for scan and lab services that the company incurs.
price after 6.75 40% of price for Manna
price after 5.4 40% of price for Manna
Common fC Direct fC Direct FC Direct VC Direct VC2
LAB&SCAN LAB SCAN LAB SCAN
5
2.5
7.5
2.5
6
1.25
30
1.25
0.125
1.25
0.31
2.5
5
16.666
15
21
236.667
150
0.54
400
125
223.666 649.167 150 2.935 4.29
352.2 772.2
3.815
1.11
any incurs.
Type of service price Lab services Scan service Column1
300 patient 120 180
percentage 0.4 0.6
price 11.25 9
total sales 1350 1620
price after 6.75 5.4 60%
sales after 810 972
Variable cost
Consumables
reagents 1.25 150
syringes 0.125 15
test kits 1.25 150
test tube 0.31 37.2
gel 1.25 225
thermal paper 2.5 450
total 352.2 675
Salaries
Ultrasonographers 6% 0.54 97.2
total 97.2
Rent,Utilities,Janitorial
total variable cost 7.225 352.2 772.2
Type of services Lab srvices scan service Column1
300 patient 120 180
percentage 40% 60%
price 11.25 9
total sales 1350 1620
Fixed cost
Depreciation expenses:
Computer and Printer 6 9
Furniture and Fittings 8.4 12.6
Laboratory Equipment 236.667
Scan Equipment 150
total 251.067 171.6
Consumables
A4 2 3
envelopes 2.4 3.6
gloves 12 18
tissue 2 3
toners 6.666 10
alcohol 2.5
bandages 7.5
cotton 2.5
total 37.566 37.6
Salaries
Administrative assistant (1) 50 75
Lab technicians (2) 400
total 450 75
total fixed cost 738.633 284.2
Assume that GEO Medical Laboratory only provides scan services, and determine the breakeven
Scan sevice
type of services price VC FC
300 petient 180
percentage 100%
price 9
total 1620
price after 5.4
gel 1.25 225
thermal paper 2.5 450
Ultrasonographers 0.54 97.2
Rent,Utilities,Janitorial
Computer and Printer 15
Furniture and Fittings 21
Scan Equipment 150
A4 5
envelopes 6
gloves 30
tissue 5
toners 16.666
Administrative assistant (1) 125
total 4.29 772.2 373.666
Contribution margin 1.11
sales 180 p 972
Vc 772.2
CM 199.8
FC 373.666
income -173.866
CM Scan per patient 1.11
Scan price variable cost 4.29
breakeven units formula Fixed cost/price C margin
price C margin formula C margin/units 1.11
breakeven units 336.636
breakeven (amounts) formulFixed cost/ C margin ratio
C margin ratio C margin/ sales 0.205556
breakeven amounts 1817.835
sales 204 p 1817.83459
Vc 1444.16859 88%
CM 373.666 12%
FC 373.666
income 0
etermine the breakeven in terms of units and sales
Lab sevice
type of services price VC FC
300 petient 120
percentage 100%
price 11.25
total 1350
price after 6.75
reagents 1.25 150
syringes 0.125 15
test kits 1.25 150
test tube 0.31 37.2
Rent,Utilities,Janitorial
Computer and Printer 15
Furniture and Fittings 21
Lab Equipment 236.667
A4 5
envelopes 6
gloves 30
tissue 5
toners 16.666
alcohol 2.5
bandages 7.5
cotton 2.5
Lab technicians (2) 400
Administrative assistant (1) 125
total 2.935 352.2 872.833
Contribution margin 3.815
sales 120 p 810
Vc 352.2
CM 457.8
FC 872.833
income -415.033
CM Lab per patient 3.815
Lab price variable cost 2.935
breakeven units formula Fixed cost/price C margin
price C margin formula C margin/units 3.815
breakeven units 228.78978
breakeven (amounts) for Fixed cost/ C margin ratio
C margin ratio C margin/ sales 0.5651852
breakeven amounts 1544.331
Column1 Column2 Column3 Column4
sales 172 p 1544.330996
Vc 671.4979961 66%
CM 872.833 34%
FC 872.833
income 0
If the only services that GEO Medical Laboratory offers are lab services, determine the nu
According to the above calcula
is achieved using less patients
services which need more pati
re lab services, determine the number of patients that the company would need to help in order to break even, as well as the break-even
According to the above calculations, the result drawn is that the breakeven point
is achieved using less patients (38patients) in scan services as compared to lab
services which need more patients (75 patients) to do so.
en, as well as the break-even amount.
Lab service petients 120 11.25 1350
scan sevices petients 180 9 1620
Types Fixed cost per Variable cost Variable cost
Consumables
A4 paper 5
Alcohol 2.5
Bandages 7.5
Cotton 2.5
Envelopes 6
Gel 1.25 225
Gloves 30
Reagents 1.25 150
Syringes 0.125 15
Test kits 1.25 150
Test tubes 0.31 37.2
Thermal print paper 2.5 450
Tissues 5
Toners 16.666
total 75.166 6.685 1027.2
Depreciation expenses:
Computer and Printer 15
Furniture and Fittings 21
Laboratory Equipment 236.667
Scan Equipment 150
total 422.667
Salaries
Ultrasonographers 0.54 97.2
Lab technicians 400
Adminstrative 125
total 525 0.54 97.2
Rent,Utilities,Janitorial
40%
total 1022.833 7.225 1124.4
price after 6.75
price after 5.4
common fC direct fC direct fc direct VC direct VC2
LAB SCAN LAB SCAN
5
2.5
7.5
2.5
6
1.25
30
1.25
0.125
1.25
0.31
2.5
5
16.666
7.5 7.5
10.5 10.5
236.667
150
0.54
400
62.5 62.5
62.666 729.667 230.5 2.935 4.29
352.2 772.2
Determine the cost structure of GEO Medical Laboratory. Is the company highly or lowly leveraged?
depends on Q1
Details Lab sevice Scan srvice total
sale 810 972 1782
VC 352.2 772.2 1124.4
CM 457.8 199.8 657.6
Direct FC 649.167 150 799.167
segmentail m -191.367 49.8 -141.567
Common FC 223.666
Net income -365.233
Operating leverage = CM/O income -1.8004944789
On the bases of operating leverage factor, the com
the problem of very low return, although it is also
This means that GEO Medical Laboratory is very
ny highly or lowly leveraged?
erating leverage factor, the company will face
y low return, although it is also at a low risk.
EO Medical Laboratory is very lowly leveraged
Assuming a multiproduct situation, how many patients and how much total rev
types patients % of total CM
Lab 120 40% 3.815
scan 180 60% 1.11
total 300 100%
Weighted-average unit contribution margin
types CM % of total total
Lab 3.815 40% 1.526
Scan 1.11 60% 0.666
total 2.192
breakeven units formula Fixed cost/ACM
total FC 1022.833
total breakeven point 466.620894160584 combined patient sales
lab's units 186.648357664234
scan's units 279.97253649635
total 466.620894160584
tients and how much total revenue does GEO Medical Laboratory need to break even in a month?
Weighted-average price contribution margin
types selling price % of total total
Lab 6.75 40% 2.7
Scan 5.4 60% 3.24
total 5.94
breakeven amounts formula Fixed cost/ACMP
WACM amounts ACM /ACM price 0.36902357
breakeven amounts 2771.72811
Lab amount 1108.69124452555
Scan amount 1663.03686678832
2771.72811131387
deatails Column2 Column3 Column4 average selling pric
target p 3000 types
FC 0 3000 Lab
A VC 3.748 Scan
A price 5.94 2.192 total
taget Patient 1368.6131
Lab 40% 547.44525547 average price Variable
scan 60% 821.16788321 types
1368.6131387 Lab
Scan
total
Formula FC+target income/CM
average selling price
selling price % of total total
6.75 0.4 2.7
5.4 0.6 3.24
5.94
average price Variable cost
P VC % of total total
2.935 0.4 1.174
4.29 0.6 2.574
3.748
Deatails Column2 Column3 sales p 8129.562
target R 3000 Vc 5129.562 78%
FC 0 3000 CM 3000 22%
A VC 3.748 FC 0
A price 5.94 income 3000
%CM ??????
Patient 1368.6131
taget Revenue 8129.562
Formula FC+target income/ %CM
Lab 40% 3251.82481752
Scan 60% 4877.73722628
8129.5620438
Boys 122 3
Girls 150 3
Item Cost for Male Students Cost for Female Students
Blood grouping reagents and sickle cel(US$ 152.50) (US$ 187.50)
Gloves (US$ 12.20) (US$ 15.00)
Optician (US$ 56.07) (US$ 68.94)
Other consumables (US$ 65.88) (US$ 81.00)
Pregnancy test kits – (US$ 187.50)
Transportation and logistics (US$ 44.85) (US$ 55.15)
Total costs (US$ 331.50) (US$ 595.08)
deatails Column2 total
students 272
revenues 816
costs
total offer costs -926.58
Eye specialist cost -125
Loss -235.58
This indicates that the offer should not be accepted, because the income obtained is not
sufficient to cover the variable costs!
Total cost
(US$ 340.00)
(US$ 27.20)
(US$ 125.00)
(US$ 146.88)
(US$ 187.50)
(US$ 100.00)
(US$ 926.58)
Wallas started his revolutionary activities after the confusions created in the research cent
the illness from which his mother was suffering. It is thought that his concerns regarding th
the cost of human services ultimately resulted in the pursuance of this approach. He is ver
social level about the kinds of administrations which he can offer. In the circumstances tha
people who require his administrations such as patients or school chairmen, are more self
may take advantage of him due to his helpful and giving behavior, and may not pay him fu
he may be provoked to provide assistance on basis of inclusion of young people, or on the
problems in his district are of grave nature, or because of some casual communication det
him that an old colleague was the means of connection. By providing contingent aid in an
Medical laboratories can multiply its lenient approach and this may give the outcome of th
after a while.
ted in the research center became linked with
his concerns regarding the right decisions and
this approach. He is very considerate on a
n the circumstances that he encounters such
chairmen, are more self-centered then they
and may not pay him fully. To be more precise,
young people, or on the basis that the
sual communication details presented before
ng contingent aid in an open setting, GEO
y give the outcome of the exploitation of office
1. According to agreement with Manna Healthcare, it seems to be absurd to expend 40%
amounts to about $1188 on utilities, rent, and janitorial administrations by taking into a
factory in the region which is about $240.
He has to renegotiate with Manna Healthcare regarding the fees charged. As it is better
situation (and unlike in the past) to set a fixed amount to be paid periodically.
2. Clarify and commit Manna Healthcare to the agreement previously entered into. So tha
laboratory automatically. If Manna Healthcare does not respond and abides by the agreem
his work to another location.
One other thought is that instead of Manna Healthcare receiving 40% of all lab profits, th
distinguish between the money received from referrals and the money paid by the custom
Healthcare providing a somewhat decreased rate for the customers who are not acquired
3. Also, it is possible to conduct marketing campaigns and provide packages of medical te
increase profit.
be absurd to expend 40% of lab and scan incomes which
trations by taking into account the cost of operating a
charged. As it is better for him and in the current
d periodically.
usly entered into. So that patients are referred to the
nd abides by the agreement, he must immediately transfer
40% of all lab profits, there may be another way to
oney paid by the customers. An example of Manna
rs who are not acquired by it yet.
packages of medical testing, which will enable it to
