can you please help understand this concept? thank you!

Required information [The following information applies to the questions displayed below.] The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at \$16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: $430,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. Note: Round your answer to 2 decimal places