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Logan Products computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 34,000 direct labor-hours would be required for the periods estimated level of production. The company also estimated $534,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logans actual manufacturing overhead for the year was $704,003 and its actual total direct labor was 34,500 hours.
Required: Compute the companys predetermined overhead rate for the year.
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