Caines Company has the following estimated costs for next year:

Direct materials $80,000

Indirect materials 8,000

Rent on factory equipment 20,000

Direct labor 35,000

Salary of production supervisor 60,000

Sales commissions 25,000

Depreciation on factory building 50,000

Advertising expense 40,000

Factory utilities 10,000

Caines estimates that 10,000 machine hours will be worked during the year. The overhead rate per machine

hour will be (Hint: Choose which of the above costs are Overhead costs, add them together, and divide the total by 10,000):

a. $14.80 c. $13.80

b. $8.80 d. $14.00