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CALCULATOR PRINTER VERSION 4 BACK NEX RCES Exercise 4-1 (Video) 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 system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. 2.b Standard $50,000 Custom $100,000 1,500 Study Direct labor costs Machine hours Setup hours 1,200 90 390 Total estimated overhead costs are $285,000. Overhead cost allocated to the machining activity cost pool is $189,000, and $96,000 is allocated to the machine setup activity cost pool. Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate 190.00 % of direct labor cost SHOW SOLUTION VIDEO: SIMILAR EXERCISE LINK TO TEXT LINK TO TEXT Your answer is correct. 1 be here to search Then X Your answer is incorrect. Try again. Determine the difference in allocation between the two approaches. LY. Traditional costing X Standard 9,500,000 Custom 19,000,000 Activity-based costing Standard 68,000 Custom 27,000 Click if you would like to Show Work for this question: Open Show Work VIDEO: SIMILAR EXERCISE LINK TO TEXT LINK TO TEXT SAVE FOR LATER Question Attempts: 3 of 5 used