A Company has two types of products: Standard and Custom. The company has used a plantwide overhead rate based on direct labour costs. The process people have heard of activity-based costing and want to see how the results would differ if this system were used. Two activity cost pool were developed: machining and machine setup. Presented below is information related to the company's operations. Standard direct labour costs = 30,000$ machine hours = 1000 setup hours = 100

custom direct labour hours = 110,000 machine hours = 1000 setup hours = 400 Total estimated overhead costs are 240 000 . Overhead cost allocated to the machining activity pool is 140 000 and 100 000 allocated to to the machine setup The tasks: (answers valid only with calculations) a) Compute the overhead rate using traditional (plantwide) approach. (2 p) b) Compute the overehead rates using the activity-based costing approach (2 p) c) Determine the difference in allocation of overheads to the Standard and Custom products between the two approaches (4 p)