Accounting Equations 1 answer below »

Wilkins 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.
StandardCustomDirect labor costs$57,100$113,000Machine hours1,1701,370Setup hours100400

Total estimated overhead costs are $309,200. Overhead cost allocated to the machining activity cost pool is $196,000, and $113,200 is allocated to the machine setup activity cost pool.

Compute the overhead rate using the traditional (plantwide) approach.(Round answers to 2 decimal places, e.g. 12.25%.)