AAprint Ltd provides high-volume offset colour and black and white printing for newspapers. It applies factory overhead to jobs on the basis of machine hours. The budgeted fixed overhead consists of a $85 000 manager’s salary, depreciation of $37 464 and rent of $55  000. The remainder is variable overhead made up of the following items.

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Indirect labour $3.75 Indirect materials 5.50 Electricity 1.80 Repairs and maintenance 0.95 This year AAPrint is printing two weekly papers-Redwood Chronicle and Somerfield Mail. The Redwood Chronicle is printed in full colour, while the Somerfield Mail is a black and white publication. Consequently, the Redwood Chronicle requires additional time on the printing press. AAPrint has two industrial offset printing machines. Each machine operates 60 hours per week for 52 weeks. All the machines hours are utilised to produce the two newspapers. (a) Prepare a factory overhead budget for 2025 based on the estimated production level. (b) Calculate the predetermined overhead rate based on machine hours.