Overhead allocation and adjustment using a predetermined overhead rate P 3 P 4 In December 2012 , Pavelka Company's manager estimated next year's total direct labor cost assuming 50 persons working an average of 2, 000 hours each at an average wage rate of $ 15 per hour . The manager also estimated the following manufacturing overhead costs for year 2013 . Indirect labor . ........." $ 159. 600 Factory supervision . .... . 120, 000 Rent on factory building . ... 70.000 Factory utilities .. 44. 000 Factory insurance expired . ........ .! ! ! ! ! ! ! ! 34. 000 Depreciation - Factory equipment ......... . " 240, 000 Repairs expense - Factory equipment ..... ...! 30.000 Factory supplies used .... 34. 400 Miscellaneous production costs . ....... . " 18. 000 Total estimated overhead costs .......... .! ! ! $750. 000 At the end of 2013 , records show the company incurred $ 725, 000 of actual overhead costs . It completed and