Calculate the predetermined overhead rate for 2014, assuming Degelman Company estimates total manufacturing overhead costs of $980,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year

Overhead absorption rate is calculated as follows:


Estimated overheads
Estimated direct labor costs

980,000/700000
= 140%

Estimated overheads
Estimated direct labor hours

980000/20000
= 490 per labor hour