Exercise 4-4 al-a2, b-(Video) Ntex Inc, manufactures two products, cor wheels and truck wheels. To determine the amount of everhead to assign to each product line, the controller, Robert Hermann, has developed the following Information Car 37,000 Truck 10,000 Estimated wheels produced Direct labor hours per wheel Total estimated overhead costs for the two product lines are $777,200 Calculate overhead rate. (Hound answer to 2 decimal places, e.g. 12.25.) Overhead rate per direct labor hour 5 Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs Car wheels Truck wheels 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 complexity There is the following three activity cost pools and related cost drivers to better understand these costs. 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 therefore develops the following tive activity control and related cost drivers to better understand these coats Estimated Use of Estimated Overhead Activity Cost Pools Cost Drivers Costs Setting up machines 1,000 setups $201.000 Assembling 67,000 labor hours 335,000 Inspection 1,200 Inspections 241,200 Compute the activity based overhead rates for these three cost pools Overhead Rates Setting up machines Assembling Inspection 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 3 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 37,000 30,000 Number of inspections 100 1,100 2 Car Wheels Truck Wheels Setting up machines dy Assembling $ Inspection Total cost assigned