Smithson, Inc. decided to implement the activitybased costing approach and was quite successful in its use. However, the controller is wondering if instead of onlyr two activity cost pools, they should expand to three activity cost pools based on the following: Family Model Deluxe Model Direct labor costs $76,000 $150,000 Machine hours 2000 2000 Setup hours 200 800 Packaging hours 5!! TF5 The estimated overhead of $450,000 is allocated as follows: machining activity cost pool $240,000, machine set up $1?0,000 and packaging $40,000. Smithson, Inc. produces two types ofgas grills: a family model and a deluxe model. Smithson's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activitybased 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 $75000 5150.000 Machine hours 2000 2000 Setup hours 200 800 Total estimated overhead costs are $450000. Overhead cost allocated to the machining activity cost pool is $270000 and $180000 is allocated to the machine setup activity cost pool