The Collins Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and machine-hours in Dept. B. At the beginning of the year, the company made the following estimates: Dept A Dept B Direct labor cost. $65,000 $42,000 Manufacturing overhead. $91,000 $48,000 Direct labor-hours Machine-hours. 8,000 3,000 10,000 12,000 What predetermined overhead rates would be used in Dept A and Dept B, respectively? Note from Dr. Beck: When the allocation base is dollars (like it is for Dept. A in this question), the rate is often stated in terms of a percentage rather than a dollar amount. For example, if for Dept. A you determine that the allocation rate is $1.25 for every dollar of direct labor cost, you could state the rate as "125% of direct labor cost. Saying the rate is "$1.25 for every dollar of direct labor cost is just as correct as stating it as a percentage, but this particular problem wants the response as a percentage. Multiple Choice