1 of 8 View Policies Current Attempt in Progress -16 E 1 Bonita Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining (machine hours) and machine setup (number of setups). The total estimated machine hours is 2,700, and the total estimated number of setups is 540. Presented below is information related to the company's operations. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1,500 1,200 Number of setups 120 420 Total estimated overhead costs are $297,000. Overhead cost allocated to the machining activity cost pool is $189,000, and $108.000 is a located to the machine setup activity cost pool. Compute the overhead rate using the traditional (plantwide) approach information related to each product's use of cost drivers. (Round answer to O decimal places, e.g. 12.) Predetermined overhead rate eTextbook and Media % of direct labor cost Compute the overhead rates using the activity-based costing approach. Machining Machine setup per machine hour per setup hour Determine the difference in allocation between the two approaches. Traditional costing Standard $ Custom 14 Activity-based costing Standard Custom 10 $