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A corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead...

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Accounting

A corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The corporation has provided the following estimated costs for the next year:
Direct materials $ 6,000
Direct labor $ 20,000
Rent on factory building $ 15,000
Sales salaries $ 25,000
Depreciation on factory equipment $ 8,000
Indirect labor $ 12,000
Production supervisor's salary $ 15,000
The corporation estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:
Multiple Choice
$2.50 per direct labor-hour
$2.79 per direct labor-hour
$3.00 per direct labor-hour
$4.00 per direct labor-hour

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