7)

Fortify, Inc. uses a predetermined manufacturing overhead rate based on direct labor hours to apply its indirect product costs to jobs. The following information has been collected for the previous year:

Direct materials $150,000

Direct labor 200,000

Sales commissions 100,000

Indirect labor 50,000

Rent on office equipment 25,000

Depreciation factory building 75,000

Utilities factory 125,000

Fortify used 25,000 direct labor hours and 50,000 machine hours during the previous year. What is the predetermined overhead rate per direct labor hour?