1) Harmony inc uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. For the year, Harmony Inc.s estimated manufacturing overhead cost was $500,000 based on an estimated activity level of 125,000 direct labor hours. Actual overhead amounted to $95,000 with actual direct labor-hours totaling 27.500 for the month. Harmony Inc. closes or over or underapplied overhead cost to cost of goods sold.

What was the predetermined overhead rate used by Harmony Inc.?