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Question 9 Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct
Question 9 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. Direct labor costs Machine hours Standard $50,000 1,200 Custom $100,000 1,200 420 Setup hours 120 Total estimated overhead costs are $305,400. Overhead cost allocated to the machining activity cost pool is $192,000, and $113,400 is allocated to the machine setup activity cost pool. (a) 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 203.6% of direct labor cost Click if you would like to Show Work for this question: Open Show Work 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 203.6% of direct labor cost Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE Attempts: 20 (b) Compute the overhead rates using the activity-based costing approach. Machining per machine hour $ Machine setup per setup hour $
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