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 90 360 Total estimated overhead costs are $291,000. Overhead cost allocated to the machining activity cost pool is $192,000, and $99,000 is allocated to the machine setup activity cost pool. (a) Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate 194 % of direct labor cost eTextbook and Media Attempts: 1 of 5 used (b) Your answer is correct. Compute the overhead rates using the activity-based costing approach. Machining $ 80 per machine hourMachine setup $ 220 per setup hour eTextbook and Media Attempts: 3 of 5 used (c) - Your answer is partially correct. Determine the difference in allocation between the two approaches. Traditional costing Standard 97000 Custom 194000 Activity-based costing Standard 116800 Custom 79200 eTextbook and Media Save for Later Attempts: 3 of 5 used Submit