Pinnacle Consulting employs two CPAs, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $$516,600$ during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $$240,000,$ and she is expected to bill $2,500$ hours during the year. Steve is a senior associate, his annual salary is $$129,000,$ and he is expected to bill $2,000$ hours during the year.

Required:

Calculate the predetermined overhead rate.

Assuming that the hourly billing rate should be set to cover the total cost of services plus a $25\%$ markup, compute the hourly billing rates for Judy and Steve.