Question 10 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 the following information. Car Truck 39,000 13,000 Estimated wheels produced Direct labor hours per wheel 1 Total estimated overhead costs for the two product lines are $826,800. (a1) Your answer is correct. Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Overhead rate 10.60 per direct labor hour Click if you would like to Show Work for this question: Open Show Work Your answer is correct. 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 413,400 $ Truck wheels 413,400 AI Myour answer is correct. 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 understand these costs. Estimated Use of Cost Drivers Activity Cost Pools Setting up machines Assembling Inspection 1,000 setups 78,000 labor hours 1,200 inspections Estimated Overhead Costs $234,000 312,000 280,800 Compute the activity-based overhead rates for these three cost pools. Overhead Rates Setting up machines 234 Assembling 4 Inspection 234 (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. Estimated Use of Cost Drivers per Product Car Truck Number of setups 200 800 Direct labor hours 39,000 39,000 Number of inspections 100 1,100 Car Wheels Truck Wheels Setting up machines $ ta Assembling $ $ Inspection $ $ Total cost assigned $