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Top Medical Laboratories does two types of medical tests, type-A and type. B. Under its current simple costing. Top Medical aggregates all operating costs (direct

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Top Medical Laboratories does two types of medical tests, type-A and type. B. Under its current simple costing. Top Medical aggregates all operating costs (direct and indirect) into a single cost pool and uses test-hours as allocation base. Type A test uses 50,000 test hours and type-B test uses 30,000 test-hours. The manager believes that there is enough variation in test procedures and cost structure to establish separate costing rates for the two types of tests based on ABC system. Accordingly, the manager divides costs into four activity-cost categories (direct and indirect): 1. Direct labor costs $240,000. these costs can be directly traced to Type A $180,000 and type 3, 560,000 2. Equipment related costs (rent, energy, maintenance, etc.), $286205. These costs are allocated to the tests on the basis of test-hours 3. Setup costs, $350,000. These costs are allocated based on the number of setup hours required. Type-A requires 13.500 setup hours, and type-B requires 4,000 setup hours. 4. Costs of designing tests, $210,000. These costs are allocated on the basis of the times required to design the tests Type-A requires 2,800 hours and type- requires 1,400 hours Required: Calculate the cost per test-hour for type-A test using ABC.costing system a. 15.38 b. 13.58 OC 21.72 d. 9.61

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