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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

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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 800 Direct labor hours 40,000 30,000 Number of inspections 100 1,100 200 Car Wheels Truck Wheels Setting up machines Assembling $ $ $ Inspection Total cost assigned $ $ 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. Estimated Use of Estimated Overhead Activity Cost Pools Cost Drivers Costs Setting up machines 1,000 setups $210.000 Assembling 70,000 labor hours 280,000 Inspection 1.200 inspections 252,000 Compute the activity-based overhead rates for these three cost pools. Overhead Rates Setting up machines $ 210.00 Assembling 4.00 Inspection 210.00

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