A company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The copany 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 company estimates that 20,000 direct labor-hours will be worked during the year.

The predetermined overhead rate per direct labor-hour will be:

A.

$3.00

B.

$2.50

C.

$4.00

D.

$2.79