The following data relate to Denyer Ltd for the year just ended: Budgeted sales revenue $307 500 Actual manufacturing overhead $510 000 Budgeted machine hours 15 000 Budgeted direct labour hours 30 000 Budgeted direct labour rate $ 21 Budgeted manufacturing overhead $546 000 Actual machine hours 16 500 Actual direct labour hours 27 000 Actual direct labour rate $ 22.50

Required: a. Calculate the firms predetermined and actual overhead rates for the year using each of the following cost drivers: I. machine hours II. direct labour hours III. direct labour cost. b. Would you recommend using an actual overhead rate or a predetermined overhead rate for Denyer Ltd? Explain your answer.