Total product cost $ 105 $215 $232 *Calculation of predetermined overhead rate: Manufacturing overhead budget: Depreciation, machinery $1 480 000 Maintenance, machinery 120 000 Depreciation, taxes and insurance for factory 300 000 Engineering 350 000 Purchasing, receiving and shipping 250 000 Inspection and repair of defects 375 000 Material handling 400 000 Miscellaneous manufacturing overhead costs 250 000 Total $3 570 000 Direct labour budget: Standard model 10 000 hours Deluxe model 1 000 hours Heavy-duty model 10 000 hours Total 21 000 hours Predetermined overhead rate: Budgeted overhead = $3 570 000. = $170 per hour Budgeted direct labour hours 21 000 hours