#1

A corporation apples overhead based upon machine hours to build custom sailboats. At the beginning of the year, they budgeted the following cost to make 50,000 units using 100,000 machine hours:

Wages of employees who build the sailboats $ 50,000

Advertising $50,000

Aluminum mast installed in sailboat $350,000

Assembly shop supervisor wages $55,000

Depreciation of power tools $30,000

Sales commissions $140,000

Rent on factory buiding $90,000

President's secretary salary $39,000

Electricity in the factory building $40,000

Executive office furniture depreciation $25,000

Depreciation on gym equipment in factory $35,000

Wages of employees in factory cafeteria $50,000

During the year, the company produced 52,000 units using 106,383 machine hours. Actual overhead for the year was $393,617.

What is the predetermined overhead rate?