Exercise 17-1 Wilkins 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 and machine setup. Presented below is information related to the companys operations. Standard Custom Direct labor costs $43,500 $107,000 Machine hours 1,150 1,480 Setup hours 110 430 Total estimated overhead costs are $306,900. Overhead cost allocated to the machining activity cost pool is $197,600, and $109,300 is allocated to the machine setup activity cost pool. Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.) Predetermined overhead rate % of direct labor cost LINK TO TEXT LINK TO TEXT Your answer is correct. Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. $12.25.) Machining $ per machine hour Machine setup $ per setup hour LINK TO TEXT LINK TO TEXT Your answer is incorrect. Try again. Determine the difference in allocation between the two approaches. (Round answers to 0 decimal places, e.g. $1,225.) Traditional costing Standard $ Custom $ Activity-based costing Standard $ Custom $