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 Setup hours Standard $50.000 1.200 120 Custom $100.000 1.200 390 Total estimated overhead costs are $304,200. Overhead cost allocated to the machining activity cost pool is $192,000, and $112,200 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, e.g. 12.25.) Predetermined overhead rate 19 % % of direct labor cost e Textbook and Media - Your answer is partially correct. Compute the overhead rates using the activity-based costing approach. Machining $ 80 per machine hour Machine setup $ 210 per setup hour e Textbook and Media * Your answer is incorrect. Determine the difference in allocation between the two approaches. Traditional costing Standard $ 99700 Custom 199400 Activity-based costing Standard $ 114900 Custom $ 184200 Ayala Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the traditional and the activity-based costing systems include direct materials and direct labor costs. Products Product 540X Product 137Y Product 2495 Sales Revenue $199,000 155,000 82,000 Total Costs Traditional ABC $57,000 $49,400 48,000 29,000 20,000 46,600 For each product line, compute operating income using the traditional costing system. $ Product 540x Product 137Y Product 2495 $ $ $ eTextbook and Media For each product line, compute operating income using the activity-based costing system. Product 540x $ $ Product 137Y $ Product 2495 $ eTextbook and Media Using the following formula, compute the percentage difference in operating income for each of the product lines of Ayala: [Operating Income (ABC) - Operating Income (traditional cost)] + Operating Income (traditional cost). (Round answers to 2 decimal places, eg. 12.25%. Enter negative answers using either a negative sign preceding the number e.g. -45.25% or parentheses eg. (45.25)%.) Product 540x % Product 137Y % Product 2495 %