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 $50,000 $100,000 Direct labor costs Machine hours Setup hours 1,200 1.200 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. 831 PM o BE g 43 o 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 e Textbook and Media Your answer is incorrect. Determine the difference in allocation between the two approaches. O BH