TB Problem $5-163($Algo$)$ Roadmaster Tires produces a variety...

Roadmaster Tires produces a variety of auto and truck tires at its Indianapolis manufacturing plant. The plant is highly automated and

uses an activity$-$based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated

with four activity cost pools are given below:

Production of $1,000$ units of a small tractor tire required $320$ labor hours and two setups and consumed $20\%$ of the product sustaining

activities.

Required:

a$.$ Instead of using ABC, Juppose the company had used labor hours as a company$-$wide allocation base. How much total overhead

would have been allocated to the tractor tire?

b$.$ How much total overhead cost will be allocated to the tire under activity$-$based costing?

c$.$ What price will be quoted if the product is priced at $25\%$ above cost? Compute the price per unit under both the direct labor hours

approach and under activity$-$based costing. The direct manufacturing costs consist of direct material of $$22$ and direct labor of $$32.$

Note: Do not round your intermediate calculations. Round your answers to $2$ decimal places.