Reference no: EM132658497

Foster Enterprises makes custom-order draperies. In late 2013, when managers prepared the budget for 2014, they estimated that manufacturing overhead would total $89,540. Because the production process is labor intensive, overhead is allocated to jobs based on direct labor hours. Managers expected total direct labor hours to amount to 407,000 hours.

During March and April of 2014, employees worked on only three jobs. Relevant information for all three jobs is given below:

Monthly Data Recorded           Job 76            Job 77                Job 78
March
Direct materials cost                $13,011             _                     _
Direct labor cost                      $36,089            _                    _
Direct labor hours                       3,836              _                     _

April

Direct materials cost                $0                  $10,951             $6,253
Direct labor cost                     $9,794              $22,824               $2,882
Direct labor hours                      1,017                 2,575           469

Job 76 was started in March, completed in April, and delivered to the customer in the same month. Job 77 was started in April, completed in April, and delivered to the customer in May. Job 78 was started in April and concluded in May.

Problem 1: What predetermined overhead rate will the company use for all jobs worked on during 2014? (Round Overhead rate to 2 decimal places, e.g. 15.25.)