Show Attempt History Current Attempt in Progress 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. Direct labor costs Machine hours Setup hours Standard Custom $50,000 $100.000 1,500 1.200 120 420 Total estimated overhead costs are $297.000. Overhead cost allocated to the machining activity cost pool is $189,000, and $108,000 is allocated to the machine setup activity cost pool (a) Your answer is correct 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 198 % of direct labor cost Attempts: 1 of 3 used (b) Your answer is correct Compute the overhead rates using the activity based costing approach. 70 Machining per machine hour 200 Machine setup 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 3 used Submit