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 companys operations.

		Standard		Custom
Direct labor costs		$ 50,000		$ 100,000
Machine hours		1,200		1,200
Setup hours		120		420

Total estimated overhead costs are $ 289,200. Overhead cost allocated to the machining activity cost pool is $ 192,000, and $ 97,200 is allocated to the machine setup activity cost pool.

Compute the overhead rates using the activity-based costing approach.

Machining		$ enter a dollar amount per machine hour	per machine hour
Machine setup		$ enter a dollar amount per setup hour	per setup hour