Gray’s Accounting pays Rita Flores $ 95,400 per year. Assume that Gray’s accountants are expected to work a total of 8,000 direct labor hours in 2016. Gray’s estimated total indirect costs are $168,000 and the allocation base used is direct labor hours.

Requirements 

1. What is Gray’s predetermined overhead allocation rate?

2. What indirect costs will be allocated to Client 507 if Flores works 15 hours to prepare the financial statements?