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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.

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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 $43,000 $120,000 Machine hours 1390 1410 Setup hours 104 410 Total estimated overhead costs are $295,000, Overhead cost allocated to the machining activity cost pool is $199,000, and $96,000 is allocated to the machine setup activity cost pool. (a) Your Answer Correct Answer Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25.) Predetermined overhead rate 180.98 % of direct labor cost eTextbook and Media Solution Attempts: 3 of 3 used (b) Compute the overhead rates using the activity based costing approach. (Round answers to 2 decimal places, els. 12.25) Machining per machine hour Machine setup per setup hour eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) The parts of this question must be completed in order, This part will be available when you complete the pat above

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