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 90 390 Total estimated overhead costs are $292,800 Overhead cost allocated to the machining activity cost pool is $192,000, and $100,800 is allocated to the machine setup activity cost pool. Your answer is incorrect. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25.) Predetermined overhead rate 195.20 % of direct labor cost 319 PM 6/24/2000 Search ORI Your answer is partially correct. Compute the overhead rates using the activity-based costing approach. Machining $ Machine setup $ 80 per machine hour per setup hour eTextbook and Media * Your answer is incorrect. Determine the difference in allocation between the two approaches. O II ch