What pre-determined overhead rate would be used

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Question - Fountain Company uses a pre-determined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

Direct materials $10,000

Direct labour $20,000

Sales commissions $40,000

Salary of production supervisor $10,000

Indirect materials $4,000

Advertising expense $8,000

Rent on factory equipment $30,000

The company estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. What pre-determined overhead rate would be used?

Reference no: EM133174072

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