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 $100,000 Direct labor costs Machine hours Setup hours $50,000 1,200 1,500 90 390 Total estimated overhead costs are $285,000. Overhead cost allocated to the machining activity cost pool is $189,000, and $96,000 is allocated to the machine setup activity cost pool. (a) Your Answer Correct Answer Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25.) Predetermined overhead rate 190 % of direct labor cost e Textbook and Media Solution Attempts: 3 of 3 used (b) Your answer is incorrect. Compute the overhead rates using the activity-based costing approach. Machining $ per machine hour Machine setup $ per setup hour