rhead rate based on direct labor costs. The president has heard of activity-based costing and wants Saddle Inc. has two t s of hand bags: sta is system were used, Two ot pools were developed: machining and machin activity Standard Custom Direct labor costs $53,000 $100,000 Machine hours 1,270 1,280 Setup hours 104 400 Total estimated overhead costs are $300,000. Overhead cost allocated to the machining activity cost pool is $200,000, and $100,000 is allocated to the machine setup activity cost pool. (a) Your answer is incorrect 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