WaterwayCompany uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $25,000, direct labor $15,000, and manufacturing overhead $20,000. As of January 1, Job 49 had been completed at a cost of $112,500and was part of finished goods inventory. There was a $18,750balance in the Raw Materials Inventory account.

During the month of January,WaterwayCompany began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month.

1.Purchased additional raw materials of $112,500on account.2.Incurred factory labor costs of $87,500.3.Incurred manufacturing overhead costs as follows: indirect materials $21,250; indirect labor $25,000; depreciation expense on equipment $15,000; and various other manufacturing overhead costs on account $20,000.4.Assigned direct materials and direct labor to jobs as follows.

Job No.

Direct Materials

Direct Labor

50$12,500$6,2505148,75031,2505237,50025,000

(a)

Calculate the predetermined overhead rate for 2020, assumingWaterwayCompany estimates total manufacturing overhead costs of $1,050,000, direct labor costs of $875,000, and direct labor hours of25,000for the year.(Round answer to the nearest whole percent, e.g. 25%.)

Predetermined overhead rateenter the Predetermined overhead rate in percentages

%

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