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Saddle Inc. has two types of handbags: standard and custom. The controller has decided to...

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Accounting

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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. Standard $ 50,000 Direct labor costs Machine hours Setup hours Custom $100,000 1,500 1,200 90 420 Total estimated overhead costs are $ 301.200. Overhead cost allocated to the machining activity cost pool is $ 189,000, and $ 112,200 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 12.25.) Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, eg, 12.25.) Predetermined overhead rate 200.8 % of direct labor cost e Textbook and Media Attempts: 1 of 3 used (b) Compute the overhead rates using the activity-based costing approach Machining $ per machine hour Machine setup $ per setup hour

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