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 Direct labor costs $75,600 $151,200 Machine hours 2.000 2,000 Setup hours 800 200 Total estimated overhead costs are $453,600. Overhead cost allocated to the machining activity cost pool is 5272.160 and $181,440 is allocated to the machine setup activity cost pool (a) Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 15-25) Overhead rate $ 2 Your answer is correct. Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, eg 15.25.) Overhead Rate Machining $ 68.04 per hour Machine set up $ 181.44 per hour (c) Your answer is partially correct. Determine the difference in allocation between the two approaches. Family Model Deluxe Model Traditional 151200 $ 302400 ABC $ 136329.48 $ 363129.48 Difference $ 15120 $ (60480)