Computing the Predetermined Overhead Rate [LO3 CC5]

Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labour hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $540,000 and the total direct labour would be 30,000 hours. Its actual total manufacturing overhead for the year was $547,900, and its actual total direct labour was 31,000 hours.

Required:

Compute the companys predetermined overhead rate for the year.