(LO 1, 2), AN Altex Inc. manufactures two products: car wheels and truck wheels. To determine ount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Car Estimated wheels produced Direct labor hours per wheel Truck 10,000 40,000 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 Overhead Costs $220,000 280,000 270,000 Estimated Use of Activity Cost Pools Setting up machines Assembling Inspection Cost Drivers 1,000 setups 70,000 labor hours 1,200 inspections Compute the activity-based overhead rates for these three cost pools. Compute the cost that is assigned to the car wheels and truck wheels product lines using a costing system, given the following information