Earth Renewal specialises in advising public bodies about recent environment regulations. it uses a job costing system. it uses a predetermined overhead recovery rate calculated as a percentage of expected direct labour costs.the budget for the next year is showing below:

direct labour hours by the professional staff of the firm	20,000
direct labour costs associated with the above hours	800,000
other support staff costs	300,000
rent	100,000
other expenses	100,000

A local water company is inviting tenders for a project that is in the area of expertise of Earth Renewal. it is estimated that the project will require 400 hours of work by professional members of the firm.

question:

1. what is the direct hourly rate for Earth Renewal and what is the overhead recovery rate?

2. calculate the cost of the job being tendered of

3. if the firm wishes to make a profit of 25% of the job's cost, how much should the tender amount be.

(PS: when do we use the overheads / direct labour hour. or overheads / direct labour cost?

and what is the difference between them?