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. Standarc Custom Direct labor costs Machine hours Setup hours $55,000 1,110 104 $106,000 1,150 380 Total estimated overhead costs are $ 302,000. Overhead cost allocated to the machining activity cost pool is $197,000, and $105,000 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, eg. 12.25.) Predetermined overhead rate | %Of direct!abor cost 1.88