=+9-25 KK Cost-plus and market-based pricing (CMA, adapted) OBJECTIVES 2, 4 Mercury 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. Two types of testing at Mercury are heat testing (HTT) and Arctic-condition testing (ACT). Mercury currently collects all of the budgeted operating costs in a single indirect cost pool. It also collects all of the estimated testing-hours in a single pool. It uses one rate per test-hour for both types of testing and marks up this hourly rate by 45% to recover administrative costs and taxes, and to earn a profit.