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wrrent Attempt in Progress Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based

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wrrent 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. Standard Custom $50,000 $100,000 Direct labor costs 1.200 1.200 Machine hours Setup hours 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. 2011 PM 6/2000 32 i o 0 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 $50,000 $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. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg. 12.25) 2 PM E O 0

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