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. Direct labor costs Machine hours Setup hours Standard $50,000 1.200 90 Custom $100,000 1.200 390 Total estimated overhead costs are $292,800. Overhead cost allocated to the machining activity cost pool is $192,000, and $100,800 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, s. 12.25) Compute the overhead rate using the traditional (plantwide) approach (Round answer to 2 decimal places, eg, 1225.) Predetermined overhead rate 195.20 % of direct labor cost Attempts: 1 of 7 (6) Your answer is correct Compute the overhead rates using the activity-based costing approach 80 per machine hour Machining Machine setup 210 per setup hour Attempts: 1 of 7 usec 0 o BA (c) Determine the difference in allocation between the two approaches. Traditional costing Standard $ Custom $ Activity-based costing Standard $ Custom $ Attempts:0 of 7 used Submit Answer Save for Later G C a a