Current Attempt in Progress

Swifty 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 $($machine hours$)$ and machine setup $($number of setups$).$ The total estimated machine hours is $2,400,$ and the total estimated number of setups is $500.$ Presented below is information related to the company's operations.

$\backslash$table$[[,$Standard,Custom$],[$Direct labor costs,$$50,000,$$$100,000],[$Machine hours,$1,200,1,200],[$Number of setups,$120,380]]$

Total estimated overhead costs are $$297,000.$ Overhead cost allocated to the machining activity cost pool is $$192,000,$ and $$105,000$ is allocated to the machine setup activity cost pool.

Compute the overhead rate using the traditional $($plantwide$)$ approach information related to each product's use of cost drivers. $($Round answer to $0$ decimal places, e$.$g$.12.)$

Predetermined overhead rate

$\%$ of direct labor cost