=+5-27 KK Proration of overhead OBJECTIVES 4, 7 Ride-On-Water Ltd (ROW) produces a line of non-motorised boats. ROW uses a normal costing system and allocates manufacturing overhead using direct manufacturing labour cost. The following data are for 2014:

Budgeted manufacturing overhead cost $150 000 Budgeted direct manufacturing labour cost $250 000 Actual manufacturing overhead cost $146 000 Actual direct manufacturing labour cost $270 000 Inventory balances on 31 December 2014 were:

Account Ending balance 2014 Direct manufacturing labour cost in ending balance Work in process $60 000 $30 000 Finished goods 260 000 80 000 Cost of goods sold 580 000 160 000 Required 1 Calculate the overhead allocation rate.