Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). In computing a predetermined overhead rate at the beginning of the year, the company's estimates were as follows: manufacturing overhead cost, $650,000; direct materials to be used in production, $500,000. The company's inventory accounts at the beginning and end of the year were as follows: Beginning Raw Materials $ 80,000 Ending $ 20,000 Work in Process Finished Goods 70,000 400,000 150,000 260,000 The following actual costs were incurred during the year: Purchase of raw materials (all direct) Direct labour cost Manufacturing overhead costs: Indirect labour Property taxes Depreciation of equipment Maintenance Insurance Rent, building $510,000 90,000 170,000 48,000 260,000 95,000 7,000 180,000 Required: 1-a. Compute the predetermined overhead rate for the year. Predetermined overhead rate %