X Company currently uses a plantwide overhead application based on expected direct labor hours to be used. The following information is anticipated at the beginning of the year. Department Ge Department K. Direct materials P 25,000 P 17,000 Direct labor hours 10,000 5,000 Machine hours 2,000 10,000 Overhead P 115,000 P 85,000 Direct Labor costs P37.50/h P 37.50/h Actual production, 25,000 units If the firm maintains the current method, what will be the overhead application rate? SHOW SOLUTION