Problem
Patrick Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $6, 132,000 (219,000 hours at $28/hour) and that factory overhead would be $1, 600,000 for the current period. At the end of the period, the records show that there had been 187,000 hours of direct labor and $1, 270,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?