Question 1: Porsche Racing produces custom race cars for professional race teams. To allocate manufacturing overhead to its jobs, the company uses a predetermined manufacturing overhead rate based on the number of direct labour hours. The engineers (direct labour) that work at the Porsche Racing division are paid $65/hour. At the beginning of the year Porsche Racing expected to incur the following: Manufacturing Overhead Cost: $1,400,000 Direct Labour Cost: $4,550,000 Direct Machine Hours: 30,000 At the end of the year, Porsche Racing actually incurred the following expenses: Direct labour cost: $4,387,500 Depreciation on plant and equipment: $900,000 On-track (after sale) servicing: $250,000 Plant General Manager salary: $325,000 Research and Development at Porsche HQ: $500,000 Machine hours: 28,500 A. Compute Porsche Racing's predetermined manufacturing overhead rate. 2 points