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activity-based costing could be used effectively by the governmental unit to determine the cost of pro viding these services. Required: Read about the services offered to the public by this governmental unit. Then discuss how Inc. manufactures automobile and truck wheels. The company produces four basic, high volume wheels used by each of the large automobile and pickup truck manufacturers. Wheelco also has two specialty wheel lines. These are fancy, complicated wheels used in expensive sports cars. Lately, Wheelco's profits have been declining. Foreign competitors have been undercuting Wheel- co's prices in three of its bread-and-butter product lines, and Wheelco's sales volume and market share have declined. In contrast, Wheelco's specialty wheels have been selling steadily, although in relatively small numbers, in spite of three recent price increases. At a recent staff meeting. Wheelco's president made the following remarks: "Our profits are going down the tubes, folks. It costs us 29 dollars to manufacture our A22 wheel. That's our best seller, with a volume last year of 17,000 units. But our basically the same wheel for 27 bucks. I don't see how they can do it. 1 think it's just one more example of foreign dumping. I'm going to write my senator about it Thank gooduess for our specialty wheels. I think we've got to get our salespeople to push those wheels more and more