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 1,200 1,200 Setup hours 120 420 Total estimated overhead costs are $ 289,200. Overhead cost allocated to the machining activity cost pool is $ 192,000, and $ 97.200is 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 costAyala 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. Total Cost: Products Sales Revenue Traditional ABC Product 540X $ 200.000 $ 53,000 $47.100 Product 137Y 162.000 48,000 29.000 Product 2495 92,000 25,000 49.900 (a) For each product line, compute operating income using the traditional costing system. Product 540X Product 137Y Product 2495EcoFabrics has budgeted overhead costs of $ 1.171,800. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 558,000for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $ 446,400and $ 725,400is allocated to the design cost pool. Additional information related to these pools is as follows. Wool Cotton Total Machine hours 124.000 124,000 248,000 Number of setups 1.240 620 1,860 (a1) Calculate the overhead rate using activity based costing. (Round answers to 2 decimal places, e.g. 12.25.] Overhead rates for activity-based costing Cutting per machine hour Design per setup