E$4-1$ Alonzo Corporation has two types of handbags: standard and custom. The controller has decided to use a plant wide 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.StandardCustomDirect labor costs$$50,000$$$100,000$Machine hours$1,0001,000$Setup hours$100400$Total estimated overhead costs are $$270,000.$ Overhead cost allocated to the machining activity cost pool is $$170,000,$ 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