Exercise 4-1 Saddile 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 company's operations. Standa rd Custom Direct labor costs Machine hours Setup hours $43,000 $102,000 1,270 380 1,310 110 Total estimated overhead costs are $303,000. Overhead cost allocated to the machining activity cost pool is $196,000, and $107,000 is allocated to the machine setup activity cost pool X Your answer is incorrect. Try again. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25) Predetermined overhead rate 2,01 % of direct labor cost