Davidson Inc. uses a standard costing system. The following monthly cost functions apply to its manufacturing overhead items:

Overhead Item	Cost function
Indirect materials	1.60 per DHL
indirect labor	2.60 pet DHL
utilities	2.40 per DHL
Insurance	$72,000
depreciation	$288,000

Information for the month of December is as follows:

Actual overhead costs incurred
Indirect materials	$187,2000
indirect labor	216,000
utilities	86,400
Insurance	$79,200
depreciation	$288,000
Total	856,800

Actual direct labor hours worked	72,000
Standard direct labor hours allowed for production achieved	81,000

Carlson uses expected capacity to calculate standard overhead rates. The monthly expected capacity is $75,000 hours.

What is the variable overhead rate?