a.
Estimated machine hours used by client 1 = 6,650,000
Estimated machine hours used by client 2 = 12,350,000
Total estimated machine hours = Estimated machine hours used by client 1 + Estimated machine hours used by client 2
= 6,650,000 + 12,350,000
= 19,000,000
Estimated manufacturing overhead = $38,000,000
Predetermined overhead rate = Estimated manufacturing overhead/Total estimated machine hours
= 38,000,000/19,000,000
= $2 per machine hours
b.
Direct labor cost of client 1 = $5,000,000
Direct labor cost of client 3 = $5,000,000
Total direct labor cost = Direct labor cost of client 1 + Direct labor cost of client 3
= 5,000,000 + 5,000,000
= $10,000,000
Estimated manufacturing overhead = $38,000,000
= Predetermined overhead rate = Estimated manufacturing overhead/Total direct labor cost
= 38,000,000/10,000,000
= $3.8 per direct labor dollar
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