Taperno Manufacturing Company Has Made the Following Cost Estimates for Next

Essay

Taperno Manufacturing Company has made the following cost estimates for next year:
$$\begin{array} { |l r| } \hline \text { Direct labor } & \$ 90,000 \\\text { Direct materials } & 72,000 \\\text { Indirect labor } & 19,200 \\\text { Indirect materials } & 8,400 \\\text { Depreciation - factory building } & 8,200 \\\text { Depreciation - factory machinery } & 4,200 \\\text { Depreciation -office equigment } & 500 \\\text { Factory utilities } & 4,900 \\\text { Factory property taxes } & 3,100 \\\text { Selling exgenses } & 25,000 \\\text { Miscellanedus overhead costs } & 5,600 \\\text { General and administrative expenses } & 19,000 \\\hline\end{array}$$ The company applies overhead based on direct labor hours.The estimated direct labor hours for next year are 16,000 hours.
Compute the overhead application rate that will be used to apply overhead during the next year.