using gand ABC E4-4B Portland Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Marie Tonet has developed the following information. Truck Estimated wheels produced40,000 10,000 Direct labor hours per wheel Total estimated overhead costs for the two product lines are $840,000 Instructions (a) Compute the overhead cost assigned to the car wheels and truck wheels, assuming (b) Tonet is not satisfied with the tradi ecauses she that direct labor hours is used to allocate overhead costs. itional method of allocating overhead believes that most of the overhead costs relate to the truck wheel product line because of its complexity. She therefore develops the following three activity cost pools and related cost drivers to better understand these costs Expected Use of Cost Drivers Estimated Overhead Costs $260,000 Activity Cost Pools Setting up machines Assembling Inspection 500 setups 35,000 labor hours 280,000 600 inspections 300,000 Compute the activity-based overhead rates for these three cost pools. (c) Compute the cost that is assigned to the car wheels and truck product lines using an activity-based costing system, given the following information. Expected Use of Cost Drivers per Produet Car Truck 400 20,000 5,000 100 Number of setups Direct labor hours Number of inspections 50 (d) What do you believe Tonet should do