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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.

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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 setup (number of setups). The total estimated machine hours is 2,400 , and the total estimated number of setups is 480 . Presented below is information related to the company's operations. Total estimated overhead costs are $300,000. Overhead cost allocated to the machining activity cost pool is $192,000, and $108,000 is allocated to the machine setup activity cost pool. Determine the difference in allocation between the two approaches. Traditional costing Standard Custom Activity-based costing Standard Custom

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