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company has the following estimated costs for 2014 Direct materials 25,000 Advertising expense 15,000 Rent on factory building 13,000 Rent on office building 8,000 Direct

  1. company has the following estimated costs for 2014

Direct materials 25,000

Advertising expense 15,000

Rent on factory building 13,000

Rent on office building 8,000

Direct labor 22,000

Depreciation on factory equipment 6,000

Indirect materials 10,000

Sales salaries 28,000

Insurance on factory equipment 12,000

Indirect labor 5,000

Property taxes on factory building 10,000

Property taxes on office building 10,000

company estimates that 32,000 direct labor hours and 20,000 machine hours will be worked during 2014. If overhead is applied on the basis of direct labor hours, the overhead application rate per hour will:

A. $2.35

C. $2.10

D. $1.40

E. $2.80

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