McBride and Associates employs two professional appraisers, each having a different specialty. Debbie specializes in commercial appraisals and Tara specializes in residential appraisals. The company expects to incur total overhead costs of $346,500 during the year and applies overhead based on annual salary costs. The salaries and billable hours of the two appraisers are estimated to be as follows:

The accountant for McBride and Associates is computing the hourly rate that should be used to charge clients for Debbie and Tara€™s services. The hourly billing rate should be set to cover the total cost of services (salary plus overhead) plus a 20 percent markup.

Required:
1. Compute the predetermined overhead rate.
2. Compute the hourly billing rate for Debbie andTara.

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Debbie Tara Annual Salary Billable Hours $150,000 2,000 $81,000 1,800