QS 19-10 (Algo) Computing predetermined overhead rate LO P3 At the beginning of the year, a company estimates total direct materials costs of $1,060,000 and total overhead costs of $1,190,000. If the company uses direct materials costs as its activity base to apply overhead, what is the predetermined overhead rate it should use during the year? Predetermined overhead rate Denominator: Numerator: 7 Rate Rate