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 wers 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 1,500 1.200 Setup hours 90 390 Total estimated overhead costs are $299,400 Overhead cost allocated to the machining activity cost poolis $199,000, and $110,400 is allocated to the machine setup activity cost pool. a) Your answer is correct. Compute the overhead rate using the traditional lantwide) approach. (Round answer to 2 decimal places, eg 12.25.) Predetermined overhead rate 199.6 5 of direct labor cost Attempts: 1 of 7 used (b) Your Answer Correct Answer Your answer is correct. Compute the overhead rates using the activity-based costing approach. Machining S 70 per machine hour Machine setup $ 230 persetup hour e Textbook and Media Solution Attempts: 7 of 7 used (c) Determine the difference in allocation between the two approaches. Traditional costing Standard S Custom S Activity-based costing Standard S Custom S