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5addle Inc.has twotypes of handbegs: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president
5addle Inc.has twotypes of handbegs: 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 ditfer if this system were used. Two activity cost poos ware devcloped: machining and machinc sctup. Presented balow is information related to the company's operations. Standard Custom costs 42000 $101,000 Direct labor Machine hours 1.200 1.270 Setup haurs 96 400 Total estimated overhead costs are $300,000. Overhead cost allocated to the mathining activity cost pool is 5200,000, and 3100,000 is alotated to the machine setup activity cost pool Compute the overhead rate using the traditional (olantwide) approach.(Round answer to 2 decimal placeseg12.25.) Predetermined overhc 38 of direct labor cost Compute the overhead rates using the activity-based costing approach Machining per machine hour Machine setup per setup hour Determine the difference in allocation between the two approaches. Standard Custom Standard Custom
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