and truck wheels be controller, Rio Assign overhead using traditional costing and ABC. (LO 1.4), AN ABC in part (a)? E17-4 Altex Inc. manufactures two products: car wheels and the amount of overhead to assign to each product line, the has developed the following information. Car Truck XLS 40,000 10,000 13 Estimated wheels produced 40,000 Direct labor hours per wheel 1 Total estimated overhead costs for the two product lines are $7700 and truck wheels, allocating Overhead muck wheel products three activity Costs $220,000 280.000 270,000 Instructions (a) Compute the overhead cost assigned to the car wheels and that direct labor hours is used to allocate overhead costs. (b) Hermann is not satisfied with the traditional method of alle he believes that most of the overhead costs relate to the truck cause of its complexity. He therefore develops the following the and related cost drivers to better understand these costs. Expected Use of Estimated Overbe Activity Cost Pools Cost Drivers Setting up machines 1,000 setups Assembling 70,000 labor hours Inspection 1,200 inspections Compute the activity based overhead rates for these three cost pools. (c) Compute the cost that is assigned to the car wheels and truck wheels productie using an activity-based costing system, given the following information Expected Use of Cost Drivers per Product Car Truck DUO Number of setups 000 200 800 Direct labor hours 40,000 30,000 100 Number of inspections 001001,100 (d) What do you believe Hermann should do