1. Show all work and label all numbers. Schwynn Inc. manufactures street bicycle tires and mountain bicycle tires. The company uses activity-based costing. Schwynn has identified three overhead activity cost pools and their related cost drivers: (1) Machine set ups, driven by the number of setups; (2) Assembling, driven by direct labor hours; and (3) Inspection, driven by the number of inspections. Data relating to the company's three activity cost pools are given below for the current year:

	Estimated	Estimated Cost Drivers
Activity Cost	Overhead	Street	Mountain
Pools	Costs	Tires	Tires
Machine set ups	$ 90,000	150	350
Assembling	$500,000	25,000	15,000
Inspection	$400,000	180	320

Required:

1. Using the traditional approach, determine the applied overhead rate for Schwynn Inc based on direct labor hours.

B. Using the activity-based costing approach, determine the applied overhead rates for Darter Company.

C. Based on Schwynns actual activity in March, presented below, determine the applied overhead assigned to mountain tires using the activity-based costing approach:

	Cost Driver
Activity Cost Pool	Mountain Tires
Machine set ups	12
Assembling	2,080
Inspection	15