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ABC, cost hierarchy, service. (CMA, adapted) CoreTech Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current

ABC, cost hierarchy, service. (CMA, adapted) CoreTech Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, CoreTech aggregates all operating costs of $1,800,000 into a single overhead cost pool. CoreTech calculates a rate per test-hour of $20 ($1,800,000 , 90,000 total t..t@hours). HT uses 50,000 test-hours, and ST uses 40,000 test- hours. Gary Celeste, CoreTech'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 services is becoming competitive. Without this information, any miscosting and mispricing of its services could cause CoreTech to lose business. Celeste divides CoreTech's costs into four activity-cost categories

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