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. Custom Standard Direct labor costs $60,000 $120,000 Machine hours 1,300 1,140 Setup hours 107 420 Total estimated overhead costs are $296,000. Overhead cost allocated to the machining activity cost pool is $198,000, and $98,000 is allocated to the machine setup activity cost pool. *(a) 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