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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
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 Estimated wheels produced Direct labor hours per wheel Car 41,000 1 Truck 10,000 3 Total estimated overhead costs for the two product lines are $752,600. (21) Your answer is correct. Calculate overhead rate. (Round answer to 2 decimal places, eg. 12.25.) Overhead rate $ 10.60 per direct labor hour Attempts: 1 of 3 used (22) Your Answer Correct Answer (Used) Your answer is correct. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. $ 434600 Car wheels Truck wheels S 318000 eTextbook and Media Solution Attempts: 3 of 3 used (b) Your answer is incorrect 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 Setting up machines Assembling Inspection Estimated Use of Cost Drivers 1,000 Setups 71.000 labor hours 1.200 inspections Estimated Overhead Costs $213,000 284,000 255,600 Compute the activity-based overhead rates for these three cost pools. Overhead Rates $ Setting up machines Assembling Inspection S S Save for Later Attempts: 1 of 3 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above
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