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Activity$-$based costing 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 $$25$ per hour and that there were no beginning inventories. The following information was available for $2019,$ based on an expected production level of $400,000$ units for the year: Activity Budgeted Cost Driver Used Cost $($Cost Driver$)$ Costs for $2019$ as Allocation Base Allocation Rate Materials handling $$3,600,000$ Number of parts used $ $1\mathrm{.}50$ per part Number of machine hours $11\mathrm{.}00$ per hour Milling and grinding $8,800,000$ Assembly and inspection $6,000,000$ Testing $1,200,000$ Direct labor hours worked $5\mathrm{.}00$ per hour Number of units tested $3\mathrm{.}00$ per unit The following production, costs, and activities occurred during the month of August: 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, Inc. b$.$ Explain 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.

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