Two activity cost pools

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 Standard Custom Direct labor costs $50.000 $100,000 Machine hours 1.500 1.500 Setup hours 90 420 Total estimated overhead costs are $312,000 Overhead cost allocated to the machining activity cost pool is $210.000, and $102.000 is allocated to the machine setup activity cost pool Compute the overhead rate using the traditional plantwide) approach. (Round answer to 2 decimal places, s. 12.25) Predetermined overhead rate % of direct labor cost e Textbook and Media Compute the overhead rates using the activity-based costing approach Machining $ Machine setup $ per machine hour persetup hour Textbook and Media Determine the difference in allocation between the two approaches Traditional contine Standard 5 Custom $ Activity-based costing Standard $ Custom $