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?

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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Description: 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. Aft

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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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