Exercise 15-13

Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each clients consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.

Estimated overhead		$990,000
Actual overhead		$1,040,800
Estimated decorator hours		40,000
Actual decorator hours		40,900

The company uses Operating Overhead in place of Manufacturing Overhead.

Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 25.55%.)

Predetermined overhead rate

$

per decorator hour