office Ltd manufactures custom made "desk chairs". At the moment the company has two types of products on the market, the"Plush"and the"Swivel". The company currently uses a traditional costing system and allocates overheadcostsbased on anestimated 83,200 direct labour hours.The following cost information has been used as a basis for pricing decisions over the past year. The company has produced 30,000 units of plush and 25,000 units of Swivel.

Per-unit data

Plush

Swivel

Direct labour hours

1.5

2.5

Direct labour cost per hour

$13

$15

Direct materials

$55

$35

Direct machine hours

5

1.5

Selling Price

$180

$120

The new company controller Ms Bossy considering the use of Activity Based Costing to apply overhead and has collected the following data:

Number of Events

Activity center

Cost driver

Traceable

costs $

Plush

Swivel

Set-ups

Number of setups

$50,000

100

100

Special design

Design hours

$182,000

900

100

Packaging

Packaging orders

$450,000

20,000

30,000

Machining

Machine hours

$150,000

9,000

1,000

Total manufacturing overhead costs

$832,000

Using the traditional costing system, calculate the company's predetermined overhead rate.

Required: (where necessary round off answer to 2 decimal places)