6. The manufacturing overhead budget at Lamy Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in August. The variable overhead rate is $8.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $132,770 per month, which includes depreciation of $24,850. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be: A. $8.60. B. $27.30. C. $23.80. D. $18.70.

Manufacturing Overhead Rate

August

Budgeted direct labor-hours

Variable manufacturing overhead rate

Variable manufacturing overhead

Fixed manufacturing overhead

Total manufacturing overhead

Direct labor-hours

Predetermined overhead rate