Privack Corporation has a standard cost system in which it applies overhead to products based on the standa direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below
Variable overhead cost per direct labor-hour $4
Total fixed overhead cost per year $560,000
Budgeted standard direct labor-hours 80000
(denominator level of activity)
Actual direct labor-hours 85,000
Standard direct labor-hours allowed for the actual output 83,000
Requirement:
Compute the predetermined overhead rate for the year.