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 $ eTextbook and Media 11.60 per direct labor hour Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to assign overhead costs. Car wheels $ 522,000 Truck wheels $ 313,200 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 Overhead Costs Estimated Use of Cost Drivers Setting up machines $216,000 1,000 setups Assembling 360,000 72,000 labor hours Inspection 259,200 1,200 inspections Compute the activity-based overhead rates for these three cost pools. Overhead Rates Setting up machines, $ /setup Assembling $ Inspection $ /DLH /inspection 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. 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 Setting up machines $ Assembling $ Inspection $ Total cost assigned $ Truck Wheels 45,000 $ $ $