Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.The Corporation has provided the following estimated costs for next year: 
Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year.The predetermined overhead rate per hour will be:
Definitions:
Deflation
A drop in the overall cost of goods and services, frequently resulting from a decrease in the availability of money or credit.
Inflation
The measurement of how swiftly the overall prices of goods and services increase, eroding the power to buy.
Intermediate Products
Goods that are used in the production process to make other goods, rather than being sold directly to consumers.
Final Products
Goods that are ready for consumption by the end user and will not undergo further manufacturing or processing.
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