AN Altex Wheels manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Jun Tsai, has developed the following information. Car Truck Estimated wheels produced 40,000 10,000 Direct labor hours per wheel 1 3 Total estimated overhead costs for the two product lines are NT$23,100,000. Instructions a. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. b. Tsai 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 follow&g 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 1,000 setups NT$6,600,000 machines Assembling 70,000 labor hours 8,400,000 Inspection 1,200 inspections 8,100,000 Compute the activity-based overhead rates for these three cost pools. c. 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 40,000 30,000 Number of inspections 100 1,100 d. What do you believe Tsai should do