Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $406,800; materials of $416,000 and direct labor of $226,000. During the year Adams incurred $424,000 in materials costs, $415,200 in overhead costs and $230,000 in direct labor costs. Compute the predetermined overhead rate.

Multiple Choice

• 56%.

• 181%.

• 98%.

• 183%.

• 180%.