Nongshin Company manufactures two types of instant noodlescold spicy noodle and hot super spicy noodle. Nongshin uses direct labor costs to allocate manufacturing overhead costs. At the end of December 2020, Nongshin estimated that the manufacturing overhead costs would total $56,000 and the direct labor costs would total $84,000 in 2021.

Nongshin had beginning and ending balances of inventories for November 2021 as follows:

	Nov. 1, 2021	Nov. 30, 2021
Raw materials	$7,100	$8,600
Work-in-process inventory	$4,100	$5,200
Finished goods inventory	$0	?

Following is a list of costs the company incurred during November 2021.

• Purchased raw materials for $6,400
• $3,200 of direct materials were used in production; Nongshin did not track the indirect materials used in the production
• Incurred 740 manufacturing hours; 70% of which was direct labor at $14 hourly rate and 30% of which was indirect labor at $10 hourly rate
• Depreciation on plant at $180
• Plant insurance at $300
• Plant property tax at $150

Nongshin produced 17,000 units and sold 14,600 units during November 2021. The sales price was $1.02 per unit.

Q7. Find the predetermined overhead allocation rate for 2021.

		52%
		57%
		62%
		67%