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

  

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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 Custom Direct labor costs $50.000 $100,000 Machine hours 1,200 1,200 Setup hours 90 420 Total estimated overhead costs are $294,000, Overhead cost allocated to the machining activity cost pool is $192,000, and $102.000 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.) Predetermined overhead rate % of direct labor cost eTextbook and Media Compute the overhead rates using the activity-based costing approach, Machining per machirke hour Machine setup %24 per setup hour Determine the difference in allocation between the two approaches Traditional.costing Standard Custom Activity based.costine Standard Custom eTextbook and Media 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 Direct labor costs $50.000 $100,000 Machine hours 1,200 1,200 Setup hours 90 420 Total estimated overhead costs are $294,000, Overhead cost allocated to the machining activity cost pool is $192,000, and $102.000 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.) Predetermined overhead rate % of direct labor cost eTextbook and Media Compute the overhead rates using the activity-based costing approach, Machining per machirke hour Machine setup %24 per setup hour Determine the difference in allocation between the two approaches Traditional.costing Standard Custom Activity based.costine Standard Custom eTextbook and Media

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Requirement 1 Predetermined overhead rate Total Estimated ove... View the full answer