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Hopkinton Test Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity Under its current timplo casting system, Hopkinton aggregates all operating costs of $1,300,000 into a single overhead cost pool Hopkinton calculates a rale per fest hour of $13 ($1,300.000 - 100.000 total test hours). HT uses 60,000 test hours and ST uses 40,000 test hours Gary O'Loughlin, Hopkinton's controller, believes that there is enough variation in test procedures and cost structures to establish separate costing and billing rates for HT and ST. The market for test sorVICOS is becoming competitive Without this information, any miscosting and mes pricing of its services could cause Hopkinton to lose business Oloughlin divides Hopkinton's costs into four activity cost categories (Click the icon to view the activity cost categories) Read the requirements rements Table Classity each activity cost as output unit-level, batch-level productor service-sustaining, or facility-sustaining. Explain each answer. Calculate the cost per fest-hour for HT and ST Explan bretly the reasons why these numbers differ from the S13 per tost hour that Hopkinton calculated using its simple costing system Explain the accuracy of the product costs calculated using the simple costing system and the ABC system How might Hopkinton's management use the cost hierarchy and ABC information to better manage its business? Direct-labor costs $243,000. These costs can be directly traced to HT, 5183.000, and ST, $60,000 Equipment-related costs (ront maintenance, energy, and so on), $400,000 These costs are allocated to HT and ST on the basis of test-hours Setup costs, $385.000 Those costs are allocated to HT and ST on the basis of the number of setup hours required. HT requires 13,500 setup hours and ST requires 4,000 setup hours Costs of designing tests $252.000 These costs are allocated to HT and ST on the basis of the time required for designing the tests HT requires 2 800 hours and ST requires 1.400 hours Incor 92/1) Print Done Print Done

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