Techno Laboratories evaluates the reaction of materials to extreme increases in temperature. Much of the​ company’s early growth was attributable to government​ contracts, but recent

Techno Laboratories evaluates the reaction of materials to extreme increases in temperature. Much of the​ company’s early growth was attributable to government​ contracts, but recent growth has come from expansion into commercial markets. After analyzing the company​ data, he has divided operating costs into the following three cost​ pools: Read the requirements5. Requirement 1. Find the single rate for operating costs based on​ test-hours and the hourly billing rate for HTT and ACT. ​(Round your answers to the nearest​ cent.) The single rate for operating costs based on test-hours is per testing hour. The hourly billing rate for HTT and ACT is . Requirement 2. Find the three​ activity-based rates for operating costs. ​(Round rates to the nearest​ cent.) First select the​ formula, then compute the rate for each of the three activities. (1) ÷ (2) = Rate Labor and supervision ÷ = Setup and facility costs ÷ = Utilities ÷ = Requirement 3. What will the billing rate for HTT and ACT be based on the​ activity-based costing​ structure? State the rates in terms of​ test-hours. Referring to both requirements 1 and​ 2, which rates makes more sense for Techno​? Complete the table to determine the billing rate for HTT and ACT based on the​ activity-based costing structure. Begin with​ HTT, then ACT. ​(Enter the markup as a ratio to two decimal​ places, X.XX. Round the cost and billing rate per testing hour amounts to the nearest​ cent.) HTT Labor and supervision Setup and facility cost Utilities Total cost Number of testing hours Cost per testing hour Markup Billing rate per testing hour ACT Referring to both requirements 1 and​ 2, which rates makes more sense for Techno​? (3)                    ​make(s) more sense.    (4) ​reflect(s) the​ way(s) the testing procedures consume the​ firm’s resources. Requirement 4. If Techno​’s competition all charge $25 per hour for arctic​ testing, what can Techno do to stay​ competitive? ​(Round the percentage to the nearest whole​ percent.) To stay competitive, Techno needs to (5) Approximately % of this type of testing’s total cost occurs in setups and facility costs. Perhaps the setup activity (6) 1: More Info Two types of testing at Technoare Heat Testing​ (HTT) and​ Arctic-condition Testing​ (ACT). Currently, all of the budgeted operating costs are collected in a single overhead pool. All of the estimated​ testing-hours are also collected in a single pool. One rate per​ test-hour is used for both types of testing. This hourly rate is marked up by 45​% to recover administrative costs and taxes and to earn a profit. 2: More Info Jeff Boone​, Techno​’s ​controller, believes that there is enough variation in the test procedures and cost structure to establish separate costing rates and billing rates at a 45​% markup. He also believes that the inflexible rate structure the company is currently using is inadequate in​ today’s competitive environment. 3: Data Table Labor and supervision $449,400 Setup and facility costs 482,980 Utilities 495,600 Total budgeted costs for the period $1,427,980 4: More Info Jeff Boone budgets 107,000 total​ test-hours for the coming period.​ Test-hours is also the cost driver for labor and supervision. The budgeted quantity of cost driver for setup and facility costs is 950 setup hours. The budgeted quantity of cost driver for utilities is 14,000 ​machine-hours. Jeff has estimated that HTT uses 70​% of the​ test-hours, 20​% of the​ setup-hours, and half the​ machine-hours. 5: Requirements 1. Find the single rate for operating costs based on​ test-hours and the hourly billing rate for HTT and ACT. 2. Find the three​ activity-based rates for operating costs. 3. What will the billing rate for HTT and ACT be based on the​ activity-based costing​ structure? State the rates in terms of​ test-hours. Referring to both requirements 1 and​ 2, which rates makes more sense for Techno​? 4. If Techno​’scompetition all charge $25 per hour for arctic​ testing, what  can Technodo to stay​ competitive?

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