Overhead rate: 2

Overhead rates using the activity-based costing approach:

Machining: 68.31 per hour

Machine Set-Up: 182.16 per hour

Also, please compute the overhead rate using activity-based costing approach:

Lily, Inc. produces two types of gas grills: a family model and a deluxe model. Lily's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently 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: Family Model Deluxe Model Direct labor costs $75,900 $151,800 Machine hours 2,000 2,000 Setup hours 200 800 Total estimated overhead costs are $455,400. Overhead cost allocated to the machining activity cost pool is $273,240 and $182,160 is allocated to the machine setup activity cost pool. Determine the difference in allocation between the two approaches. Family Model Deluxe Model Traditional $ $ ABC $ $ Difference $ $ 21252