Harbor Wheel Company manufactures two tractor wheels: the Ultimate which sells for $1,600 and the Standard, which sells for $1,300. The company currently uses traditional costing and assigns overhead on the basis of direct labor hours (DLH). Total estimated overhead was $7,600,000 and estimated total direct labor hours were 200,000. Management is considering using actity-based costing to compare overhead allocations before making a final decision. Current Traditional Costing: Ultimate Standard Direct materials per wheel $700 $420 Direct labor cost per wheel $120 $100 Direct labor hours per wheel 6 5 Total units produced 25,000 10,000 Activity-Based Costing: Activity Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost Drivers Ultimate Standard Purchasing purchase orders $1,200,000 40,000 17,000 23,000 Machine setups machine setups 900,000 18,000 5,000 13,000 Machining machine hours 4,800,000 120,000 75,000 45,000 Quality Control inspections 700,000 28,000 11,000 17,000 $7,600,000 INSTRUCTIONS Using the information above, match each item with the correct answer. Hint: Each item has only one correct answer. Overhead applied to a single Ultimate wheel using traditional costing: Choose... 15,000 45,000 inspections 700.000 28,000 11,000 17,000 $7,600,000 INSTRUCTIONS Using the information above, match each item with the correct answer. Hint: Each item has only one correct answer. Overhead applied to a single Ultimate wheel using traditional costing: Total manufacturing cost of the Standard wheel using traditional costing: Choose... . Choose... Activity-based overhead rate for Quality Control: Choose... . Choose... Machining overhead applied to the Standard wheel using activity-based costing: Total manufacturing overhead applied to each Ultimate wheel using activity-based costing: Choose... Next pa & Solutions