Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 Your Answer Correct Answer Your answer is correct. 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 $ 213.00 Assembling $ 4.00 Inspection $ 213.00 e Textbook and Media Solution Attempts: 2 of 3 used 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 41,000 30.000 Number of inspections 1,100 100 Car Wheels Truck Wheels Setting up machines $ $ Assembling $ $ Inspection $ $ Total cost assigned $ $ Save for Later Attempts: 0 of 3 used Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started