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 $43.000 1.310 110 Custom $102,000 1.270 380 Total estimated overhead costs are $303,000. Overhead cost allocated to the machining activity cost pool is $196,000, and $107.000 is allocated to the machine setup activity cost pool. x Your answer is incorrect. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places. c.8. 12.25.) 95 of direct labor cost Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg 12.25.) Predetermined overhead rate 209 % of direct labor cost e Textbook and Media Your answer is correct. N Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. 12.25.) Machining 75.97 per machine hour Machine setup $ 218:37 per setup hour Determine the difference in allocation between the two approaches. (Round answers to decimal places, eg. 1,225.) Traditional costing Standard GA 89870 Custom $ 213180 Activity-based costing Standard $ 123541 Custom CA 360310