Waterway 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 $ 50,000 Custom $ 100,000 Direct labor costs Machine hours Setup hours 1,200 1.200 90 390 Total estimated overhead costs are $ 292,800. Overhead cost allocated to the machining activity cost pool is $ 192,000, and $ 100,800 is allocated to the machine setup activity cost pool. * Your answer is incorrect. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25.) X Your answer is incorrect. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25.) Predetermined overhead rate 1.95 % of direct labor cost * Your answer is incorrect. Compute the overhead rates using the activity based costing approach. Machining per machine hour Machine setup $ per setup hour * Your answer is incorrect. Determine the difference in allocation between the two approaches. Traditional costing Standard Custom Activitybased costing Standard $ Custom