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 1,500 1,200 Setup hours 90 390 Total estimated overhead costs are $294,600. Overhead cost allocated to the machining activity cost pool is $189,000, and $105,600 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 eTextbook and Media Solution Your answer is partially correct. 160 % of direct labor cost Compute the overhead rates using the activity-based costing approach. Your answer is partially correct. Compute the overhead rates using the activity-based costing approach. Machining 70 per machine hour Machine setup $ 200 per setup hour eTextbook and Media Solution * Your answer is incorrect. Determine the difference in allocation between the two approaches. Traditional costing Standard 80000 Custom $ 160000 Activity-based costing Standard $ 90000 Custom $ 150000