MedTech Inc. 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 $20 per hour and that there were no beginning inventories. The following information was available for 2019, based on an expected production level of 400,000 units for the year: Activity Cost Driver Materials handling Milling and grinding Assembly and inspection Testing Budgeted Costs for 2019 $3,600,000 8,800,000 6,000,000 Cost Driver Used as Allocation Base 1,200,000 Number of parts used Number of machine hours Direct labor hours worked Number of units tested The following production, costs, and activities occurred during the month of August Cost Allocation Rate $ 1.50 per part 11.00 per hour 5.00 per hour 3.00 per unit. Units Produced/Tested 50,000 Direct Materials Costs $3,500,000 Number of Parts Used 275,000 Machine Hours 95,000 Direct Labor Hours 160,000 Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested 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 August using this alternative method) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ABC does not help in decision-making ABC systems produce more accurate financial Information. 2 ABC approach is likely to provide better information to manufacturing managers ABC helps in decision-making. ABC systems produce more accurate product costing information < Prev 11 of 20 Next >