Problem 4-25 (Part Level Submission) Frameworks Artisans creates hand-painted picture frames. The frames are cast from resin in an automated process. Once the casting is done, talented artisans hand-paint one of fifteen designs on each frame. In the final assembly process, a worker inserts the glass pane and attaches the backing to the frame. Frameworks' budget for the current year, along with the production requirements for two of the frames it produces, are as follows:
| Department |
| Casting |
Painting |
Assembly |
| Direct labor hours |
- |
63,700 |
12,500 |
| Machine hours |
28,100 |
- |
871 |
| Manufacturing overhead cost |
$254,000 |
$290,000 |
$51,000 |
| Seasons of Fun Frame |
Department |
| Casting |
Painting |
Assembly |
| Direct labor hours |
- |
0.5 |
0.1 |
| Machine hours |
1 |
- |
0.05 |
| Birth Announcement Frame |
Department |
| Casting |
Painting |
Assembly |
| Direct labor hours |
- |
1 |
0.2 |
| Machine hours |
0.5 |
- |
0.05 |
Assume that Frameworks Artisans uses a single predetermined overhead application rate based on direct labor hours. Calculate the rate for the current year. (Round overhead rate to 2 decimal places, e.g. 3.54.)