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 1,500 1,200 Setup hours 90 390 Total estimated overhead costs are $299,400. Overhead cost allocated to the machining activity cost pool is $189,000, and $110,400 is allocated to the machine setup activity cost pool. (a) Your Answer Correct Answer (Used) Compute the overhead rate using the traditional (plantwide) approach.(Round answer to 2 decimal places, eg, 12.25) Predetermined overhead rate 199.60 % of direct labor cost (a) Your Answer Correct Answer (Used) Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg, 12.25.) Predetermined overhead rate 199.60 % of direct labor cost (b) Your Answer Correct Answer Your answer is correct Compute the overhead rates using the activity based costing approach. Machining $ 70 per machine hour Machine setup $ 230 per setup hour (c) Determine the difference in allocation between the two approaches. Traditional costing Standard Custom $ $ Activity-based costing Standard $ Custom $ Save for Later Attempts: 0 of 2 used Submit