Requirements 1. 2. Classify each activity cost as output unit-level, batch-level, product- or service-sustaining, or facility-sustaining. Explain each answer. Calculate the cost per test-hour for HT and ST. Explain briefly the reasons why these numbers differ from the $15 per test-hour that Milton calculated using its simple costing system. Explain the accuracy of the product costs calculated using the simple costing system and the ABC system. How might Milton's management use the cost hierarchy and ABC information to better manage its business? 3. Print Done = Homework: Chapter 5: Activity-Based Costing and Acti... Question 1, E5-19 (simila... Part 1 of 13 HW Score: 0%, 0 of 4 points O Points: 0 of 1 Save Milton Test Laboratories does heal testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, Milton aggregates all operating costs of $1,275,000 into a single overhead cost pool. Milton calculates a rate per test-hour of S15 (51.275,000 - 85,000 total test-hours). HT uses 60.000 test-hours, and ST uses 25,000 test-hours. Gary Maloney, Milton'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 Milton to lose business. Maloney divides Milton's costs into four activity-cost categories B (click the icon to view the activity-cost categories.) Read the comicament Requirement Classify each activity cost as output unit-level, batch-level, product- service-sustaining, or facility-sustaining. Explain each answer Cost Item Cost-type a. Direct labor b. Equipment-related costs (rent, maintenance, energy, etc.) C. Setup costs d. Costs of designing tests