Predetermined overhead rates for various cost drivers: manufacturer The following data relate to Denyer Ltd for the year just ended.

Budgeted sales revenue......................................$307,500

Actual manufacturing overhead............................$510,000

Budgeted machine hours.......................................15,000

Budgeted direct labour hours.................................30,000

Budgeted direct labour rate.........................................21

Budgeted manufacturing overhead........................$546,000

Actual machine hours..........................................16,500

Actual direct labour hours.....................................27,000

Actual direct labour rate.......................................$22.50

Required:

1. Calculate the firm's predetermined and actual overhead rates for the year using each of the following cost drivers:

(a) Machine hours.

(b) Direct labour hours.

(c) Direct labour cost.

2. Would you recommend using an actual overhead rate or a predetermined overhead rate for D Ltd? Explain your answer.