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Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithson's controller has decided to use a plantwide overhead rate

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Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithson's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently 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: Family Model Deluxe Model $78,300 $156,600 Direct labor costs Machine hours Setup hours 2,000 2.000 200 800 Total estimated overhead costs are $469,800. Overhead cost allocated to the machining activity cost pool is $281,880 and $187.920 is allocated to the machine setup activity cost pool. Determine the difference in allocation between the two approaches. Family Model Deluxe Model Traditional $ TA ABC $ $ Difference $ $

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