costing and ABC Excel EU. ILU, 2) SUH. THIS WULSU S . S LUSUL TULUI SULLIUCU 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 and machine setup. Presented below is information related to the company's operations, Standard $50,000 1.000 100 Custom $100,000 Direct labor costs Machine hours Setup hours 1.000 400 Total estimated overhead costs are $240,000. Overhead cost allocated to the machining activity cost pool is $140,000, and $100,000 is allocated to the machine setup activity cost pool Instructions a. Compute the overhead rate using the traditional (plantwide) approach b. Compute the overhead rates using the activity based costing approach. c. Determine the difference in allocation between the two approaches. ERA