Concord, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following:

Family Model. Deluxe Model

Direct labor costs $ 77,100 $ 154,200

Machine hours 2,000 2,000

Setup hours 200 800

Packaging hours 50 75

The estimated overhead of $ 462,600 is allocated as follows: machining activity cost pool $ 246, 720, machine set up $ 174,760 and packaging $ 41,120. (1) Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, e.g. 15.25.) Overhead Rate Machining= 61.68

machine setup =174.76 per hour

packaging 328.96 per hour

(2) Calculate the overhead allocation for the family model and the deluxe model using three activity cost pools. Overhead Allocation

Family model =174,760 Deluxe model $287,840

****What is the difference in allocation between two activity cost pools and three activity cost pools? Is the difference in allocation worth using the third activity cost pool? Difference ??? I need help with the difference in simple terms not excel sheets please explain step by step***