Reference no: EM131723400

Question - ABC Company uses a pre-determined overhead rate based on direct labor hours to apply overhead to jobs. At the beginning of 2018, the company estimated the following costs would be incurred:

direct materials ...................   $ 62,500

direct labor .......................     96,000 (8,000 hours expected)

advertising expense ................     15,000

utilities ..........................     30,000

rent on factory building ...........     18,000

depreciation on factory equipment ..      9,000

indirect materials .................     14,000

sales commissions ..................     33,000

production supervisor's salary .....     28,500

45% of the utilities relate to the administrative office buildings while 55% of the utilities relate to the factory.

Calculate ABC Company's pre-determined overhead rate based on direct labor hours. List your answer with two places after the decimal point.