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Evaluate the Predetermined Overhead Rate
Logan Products computes its pre-evaluated overhead rate annually on the basis of direct labor hours. At the starting of the year, it estimated that 28,000 direct labor-hours would be needed for the period's estimated level of production. The company also evaluated $578,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $4.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $749,346 and its real total direct labor was 28,500 hours.
Required:
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