Question 1 Globetrotters Ltd makes road trailers to the precise specifications of individual customers. The following are predicted to occur during the forthcoming year, which is about to start:

Direct materials cost
£50,000
Direct labour cost
£160,000
Direct labour time
16,000 hours
Indirect labour cost
£25,000
Depreciation of machinery
£8,000
Rent and rates

£10,000

Heating, lighting and power
£5,000
Indirect materials
£2,000
Other indirect costs
£1,000
Machine time
3,000 hours
All direct labour is paid at the same hourly rate. A customer has asked the business to build a trailer for transporting a racing car to races.
• It is estimated that this will require materials and components that will cost £1,150.
• It will take 250 direct-labour-hours to do the job, of which 50 involve the use of machinery.
Required:
(a) Calculate two feasible overhead rates for the year.