A company estimates that it has $400,000 in variable overhead costs annually and $265,000 in fixed rate overhead costs annually. Last year the variable and fixed overhead costs were $300,000 and...

A company estimates that it has $400,000 in variable overhead costs annually and $265,000 in fixed rate overhead costs annually. Last year the variable and fixed overhead costs were $300,000 and $200,000, respectively. The firm estimates that it will have 32,500 direct labor hours this year.


What is the firm’s predetermined overhead rate?