How do I calculate Overhead application rate?

estimated annual overhead costs divided by estimated annual activity base

The activity base will be given in the problem, and common ones used are direct labor hours and machine hours.

For instance, if overhead costs are estimated to be $200,000 and machine hours are estimated to be 100,000:

$200,000/100,000 hrs = $2 per machine hour, which is your rate to be used all year.