Question 21 Elle Inc. makes two types of handbags: standard and custom. The controller has decided to use a plant-wide overhead rate based on direct labour 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 set up. Presented below is information related to the company's operations Diract labour costs Machine hours Set-up hours Standarod 55D,000 500 100 Custom $10D,000o 1,000 400 Total estimated averhead costs are $270,000. The overhead cost allocated to the machining activity cost paal is $168,000, and 102,000 is allocated to the machine set-up activity cost pool. Calculate the overhead rate using the traditional (plant-wide) approach. Predetermined overhead rate % of direct labau r cost