Help System Announcements CALCULATOR NEXT PRINTER VERSION BACK 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. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1,200 1,200 Setup hours 120 420 Total estimated overhead costs are $289,200. Overhead cost allocated to the machining activity cost pool is $192,000, and $97,200 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 Compute the overhead rates using the activity-based costing approach. Machining per machine hour Machine setup per setup hour Determine the difference in allocation between the two approaches. Traditional costing Standard $ Custom Activity-based costing Standard Custom $ MacBook Pro 1,200 1,200 420 Setup hours 120 -1 -3 Total estimated overhead costs are $289,200. Overhead cost allocated to the machining activity cost pool is $192,000, and $97,200 is allocated to the machine setu deo) -7 2 a-c -a2b-c 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 -e Compute the overhead rates using the activity-based costing approach. y Study Machining per machine hour Machine setup per setup hour Determine the difference in allocation between the two approaches. Traditional costing Standard Custom Activity-based costing Standard Custom Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 3 used SAVE MacBook Pro