Coronado 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 sefup $($number of setups$).$ The total estimated

machine hours is $3,000,$ and the total estimated number of setups is $510.$ Presented below is information related to the company's

operations.

Total estimated overhead costs are $$312,000.$ Overhead cost allocated to the machining activity cost pool is $$210,000,$ and $$102,000$

is allocated to the machine setup activity cost pool.

$($a$)$

Compute the overhead rate using the traditional $($plantwide$)$ approach information related to each product's use of cost drivers.

$($Round answer to $0$ decimal places, e$,$g$.12.)$

Predetermined overhead rate

$\%$ of direct labor cost

Total estimated overhead costs are $$312,000.$ Overhead cost allocated to the machining activity cost pool is $$210,000,$ and $$102,000$

is allocated to the machine setup activity cost pool.

fa$)$

$($b$)$

Compute the overhead rates using the activity$-$based costing approach.

Machining

$

per machine hour

Machine setup

$

per setup