E4.4 (LO 1, 2), AN 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 traditional the following information. Excel Truck Car 10,000 3 40,000 1 Estimated wheels produced Direct labor hours per wheel Total estimated overhead costs for the two product lines are $770,000. Instructions a. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to assign overhead costs. b. 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 under- stand these costs Estimated Use of Cost Drivers Estimated Overhead Activity Cost Pools Setting up machines Assembling Inspection Costs 1,000 setups 70,000 labor hours 1,200 inspections $220,000 280,000 270,000 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