Overhead is applied on the basis of direct labor hours. (a) Compute the predetermined overhead rate. Estimated Overheads cost = 975000 Divide: Estimated DLH = 100,000 OH rate per DLH = 9.75 (b) Determine the amount of overhead applied for the year. Actual DLH worked = 92000 OH rate per DLH = 9.75 Actual Overheads applied = 897000 .While a single OH rate based on MH or DLH is used for all types of overheads incurred in the plant, the overheads applied under Activity based costing are distinct. As opposed to this, in Activity-based costing, each activity is broken down into its own category, and costs associated with each are grouped together. Following a thorough evaluation, certain activity drivers are selected; these activity drivers are usually unique to each activity. Therefore, Activity-based pricing is a more comprehensive method for analyzing OH and allocating OH to cost centers. Consequently, OH allocations will vary between the two pricing methods.