Saddle Inc. has two types of handbags: standard and custom. The controller has decided to...
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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. Direct labor costs Machine hours Setup hours Standard Custom $50,000 $100,000 1.500 1.200 90 390 Total estimated overhead costs are $294.600. Overhead cost allocated to the machining activity cost pool is $189,000, and $105,600 is allocated to the machine setup activity cost pool X Your answer is incorrect Commute the overhead rate using the traditional Colantwide) approach (Round answer to 2 decimal places.ee 1225 1.96 % of direct labor cost Predetermined overhead rate
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