Willow Creek Corporation bases its
predetermined overhead rate on the estimated labor hours for the upcoming year.
At the beginning of the most recently completed year, the company estimated the
labor hours for the upcoming year at 38,500 labor hours. The estimated variable
manufacturing overhead was $7.37 per labor hour and the estimated total fixed
manufacturing overhead was $601,328. The actual labor hours for the year turned
out to be 41,721 labor hours.
Compute the company's predetermined overhead rate for the recently completed
year. (Points : 25)