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HealthTech Incorporated manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials

HealthTech Incorporated manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $21 per hour and that there were no beginning inventories. The following information was available for 2022, based on an expected production level of 633,333 units for the year:

Activity Cost Driver Budgeted Costs for 2022 Cost Driver Used as Allocation Base Cost Allocation Rate
Materials handling $ 5,100,000 Number of parts used $ 1.75 per part
Milling and grinding 8,900,000 Number of machine hours 13.50 per hour
Assembly and inspection 6,200,000 Direct labor hours worked 4.50 per hour
Testing 1,900,000 Number of units tested 3.00 per unit

The following production, costs, and activities occurred during the month of April:

Units Produced/Tested Direct Materials Costs Number of Parts Used Machine Hours Direct Labor Hours
50,000 $ 3,200,000 285,000 93,000 165,000

Required:

A. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of April for HealthTech.

Note: Round "Cost per unit" to 2 decimal places.

B. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have to calculate the overhead that would be applied for the month of April using this alternative method.)

Note: You may select more than one answer. .

check all that apply

_ ABC does not help in decision-making.

_ ABC systems produce more accurate financial information.unanswered

_ ABC approach is likely to provide better information to manufacturing managers.unanswered

_ABC helps in decision-making.unanswered

_ABC systems produce more accurate product costing information.unanswered

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