Test Laboratories does heat testing$($HT$)$ and stress testing$($ST$)$ on materials and operates at capacity. Under its current simple costing$$ system, Vineyard aggregates all operating costs of $ $1$ comma $200$ comma $000$ into a single overhead cost pool. Vineyard calculates a rate per$$ test$-$hour of $ $16($$ $1$ comma $200$ comma $000-$: $75$ comma $000$ total$$ test$-$hours$).$ HT uses $50$ comma $000$test$-$hours, and ST uses $25$ comma $000$test$-$hours. Gary Lawler$,$ Vineyard$\text{'}$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 Vineyard to lose business. Lawler divides Vineyard$\text{'}$s costs into four$$ activity$-$cost categories.