E25-1 Wheels, Inc., uses activity-based costing to account for its chrome wheel manufac- turing process. Company managers have identified four manufacturing activities; materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for 20X3 and their allocation bases are as follows: Activity Materials handling Machine setup Insertion of parts Finishing Total Total Budgeted Cost $ 18,000 2.800 24,000 60.000 $104,800 Allocation Base Number of parts Number of setups Number of parts Finishing direct labor hours Wheels, Inc., expects to produce 2,000 chrome wheels during the year. The wheels are expected to use 12,000 parts, require 8 setups, and consume 1,000 hours of finishing time. Required 1. Compute the cost allocation rate for each activity. 2. Compute the indirect manufacturing cost of each wheel.