As part of its transition to an ABC system, Clark Cleaning Services has identified the following activity cost pools and cost drivers:

Cost Pool

Driver

Est. Overhead

Administration

Number of hours

$60,000

Travel

Miles driven

$11,200

Customer development

Revenue billed

$576,000

If Clark expects to use 3,200 hours of administrative time next year, what is the firm's activity-based overhead rate for administration?

a.

$18.75 per hour

b.

$18.00 per hour

c.

$3.50 per hour

d.

$15.75 per hour