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 Setup hours 1,200 1,200 90 420 Total estimated overhead costs are $294,000. Overhead cost allocated to the machining activity cost pool is $192,000, and $102,000 is allocated to the machine setup activity cost pool. (a) x 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 980 % of direct labor cost