Jones Manufacturing Company makes two products. The companys budget includes $536,250 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 21,450. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information:

Estimated Cost Estimated Activities

Orders processed $70,000 5,000 orders

Machine setups 12,420 540 machine hours

Shipping 26,685 59,300 shipments

$109,105

(a) Calculate the companys overhead rate based on total direct hours.

The companys overhead rate $______________ per direct labor hour