Exercise 17-1 Saddle 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 ystem were used. Two activity cost pools were devaloped: machining and machine setup. Prestedbalow is information ralated to the company's oparations. Standard Custom Direct labor costs Machine hours Setup hours 58,000 $97,000 1,220 400 1.190 109 Total estimated overhead costs are $304,000. Overhead cost allocated to the machining activity cost pool is $197,000, and $107,000 is allocated to the machine setup activity cost pool Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g.12.25.) Predetermined overhead rate of direct labor cost VIDEO: SIMILAR EXERCISE Compute the overhead rates using the activity-based coating approach. (Round answers to 2 decimal places, e.g. 12.25.) Machining Machine setup per machine hour per setup hour LINK TO TEXT Determine the difference in allocation between the two approaches. (Round answers to O decimal places, e.g. 1,225.) aditional costing Standard Custom Standard Custom