Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information.

		Car		Truck
Estimated wheels produced		45,000		9,000
Direct labor hours per wheel		1		3

Total estimated overhead costs for the two product lines are $835,200.

Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.)

Overhead rate

$enter a dollar amount per direct labor hour rounded to 2 decimal places

per direct labor hour

eTextbook and Media

Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs.

Car wheels		$enter a dollar amount
Truck wheels		$enter a dollar amount

eTextbook and Media

Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs.

Activity Cost Pools		Estimated Use of Cost Drivers			Estimated Overhead Costs
Setting up machines		1,000	setups		$216,000
Assembling		72,000	labor hours		360,000
Inspection		1,200	inspections		259,200

Compute the activity-based overhead rates for these three cost pools.

		Overhead Rates
Setting up machines		$enter a dollar amount
Assembling		$enter a dollar amount
Inspection		$enter a dollar amount

eTextbook and Media

Compute the cost that is assigned to the car wheels and truck wheels product lines using an activity-based costing system, given the following information.

Estimated Use of Cost Drivers per Product
		Car		Truck
Number of setups		200		800
Direct labor hours		45,000		27,000
Number of inspections		100		1,100

		Car Wheels		Truck Wheels
Setting up machines		$enter a dollar amount		$enter a dollar amount
Assembling		$enter a dollar amount		$enter a dollar amount
Inspection		$enter a dollar amount		$enter a dollar amount
Total cost assigned		$enter a total amount		$enter a total amount