Exercise 4-4 a1-a2, b-c (Video) 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 followinginformation. Car Truck Estimated wheels produced 44,000 9,000 Direct labor hours per wheel 1 3 Total estimated overhead costs for the two product lines are$823,600.

Calculate overhead rate. (Round answer to 2 decimalplaces, e.g. 12.25.) Overhead rate $ per direct labor hour

Compute the overhead cost assigned to the car wheels and truckwheels, assuming that direct labor hours is used to allocateoverhead costs. Car wheels $ Truck wheels $

Hermann is not satisfied with the traditional method ofallocating overhead because he believes that most of the overheadcosts relate to the truck wheels product line because of itscomplexity. He therefore develops the following three activity costpools and related cost drivers to better understand thesecosts. Activity Cost Pools Estimated Use of Cost Drivers Estimated Overhead Costs Setting up machines 1,000 setups $213,000 Assembling 71,000 labor hours 355,000 Inspection 1,200 inspections 255,600 Compute the activity-based overhead rates for these three costpools. Overhead Rates Setting up machines $ Assembling $ Inspection $

Compute the cost that is assigned to the car wheels and truckwheels product lines using an activity-based costing system, giventhe following information. Estimated Use of Cost Drivers per Product Car Truck Number of setups 200 800 Direct labor hours 44,000 27,000 Number of inspections 100 1,100 Car Wheels Truck Wheels Setting up machines $ $ Assembling $ $ Inspection $ $ Total cost assigned $ $ Click if you would like to Show Work for thisquestion: Open Show Work