Reformer Company estimates that 64,000 direct labor hours will be worked and 80,000 machine hours will be incurred during the year. In addition, the company has developed the following cost estimates for next year:
|
Sales commissions
|
$600,000
|
|
Direct labor
|
440,000
|
|
Salary of production supervisor
|
280,000
|
|
Rent on factory equipment
|
128,000
|
|
Direct materials
|
120,000
|
|
Advertising expense
|
88,000
|
|
Indirect materials
|
40,000
|
If overhead is applied on the basis of direct labor hours, what is the company's predetermined overhead rate?