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Your Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs....

Your Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:   

Direct materials.........................................

$1,000

Direct labor................................................

$3,000

Sales commissions.....................................

$4,000

Salary of production supervisor................

$2,000

Indirect materials.......................................

$400

Advertising expense..................................

$800

Rent on factory equipment........................

$1,000

Your Company estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. What is the predetermined overhead rate for the

year?

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