CLICK HERE TO SAVE YOUR WORK AB Exercise Six Points); Aver Test Laboratories does heat testing (HT) and stress testing (STM Under its current costing system Ayer aggregates all operating costs of $1,230,000 into a single overh Ayer calculates a rate per test-hour of $15 ($1.230,000/82,000 total test-hours). HT uses 55.000 test-ho se 27.000 test-hours. Gary Savarese, Aver's controller, believes that there is enough variation in test preto cost structures to establish separate costing and billing rates. The market for test services is very compe without this information, any miscosting and mispricing could cause Ayer to lose business. Savarese break Ayed costs into four activity-cost categories. 1. Direct-labour costs. $126,000. These costs can be directly ITU SV.000, and ST. $36.000 2. Equipment-related costs. $410,000. These costs relatinet and ST on the basis of test-hours. 3. Setup costs. $430,000. These costs are allocated to HT based on the number of setup-hours required. HT requires 13,500 setup-hours, and singer og 4. Costs of designing tests. $264,000. These bateantel and st based on the time required to design the tests. HT requires 3,000 hours, and sisterwiera MALAMAT 10 11 12 13 15 16 17 918 Required: 1. Classify each activity costs as autora PAREbatch-level product or service-sustaining, or facility-sustaining Direer labour Equipment-delated costs Setup costs Costs of designing tests Calculate the cost per test-hour for HT and ST using activity-based costing (ABC). Computation of activity rates. Total activity cost Total allocation base Activity rate Equipment Setup Instructions Ex. 1 Ex. 2 Ex. 3 Ex. 4 Ex. 5 Ex 6 Ex. 7 New... 2 Setup costs Costs of designing tests 22 23 24 25 INI 26 27 MIHIHIHIIIIIHIMA 28 IIIIIIIIIIIIIIIIIIIIIII 29 IIIIII 30 31 2. Calculate the cost per test-hour for HT and ST using activity-based costing (ABC). Computation of actiwn rates, Total ach cost oral allocation base Actitrate Equipment Setup Design Computation of total cost and cost per rest honom Heat Test (HT) Stress Test /ST) Direct labour Equipment Setup Design Total Test hours Cost per test hour 32 33 34 35 36 37 38 39 40 Instructions Ex. 1 Ex. 2 Ex. 3 Ex. 4. Ex. 5 Ex. 6 Ex. 7 New