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Crane Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert
Crane 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 (a1) (a2) (b) (c) Total estimated overhead costs for the two product lines are $837,400. Number of setups Direct labor hours Number of inspections Setting up machines $ 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 Assembling Inspection Car Total cost assigned 43,000 $ $ Car 1 200 Truck 43,000 12,000 100 Truck 800 36,000 3 1,100 Car Wheels $ $ +A $ $ Truck Wheels
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