Polycoton Inc. manufactures spring coats designed with organic cotton and polyester. To design the coats, part of the work is done manually and partly involves making the inside padding of the coat with the organic cotton. The other main part of the production mostly involves sewing the seams of the coat. Due to the availability of information, Polycoton allocates its manufacturing overhead based on direct labor hours. 

In 20X1, 90,000 hours were needed to produce 60,000 coats and employees were paid an average of $32.55/hr. For 20X2, the production manager planned to produce 61,000 units for the year. The production manager has confirmed that it will take the workers the same time to produce the coats as in 20X1. Total manufacturing overhead is estimated at $3,636,000. Variable overhead will be $24 per direct labor hour. What should have been the allocation rate of the total manufacturing overhead if the forecasted production volume had been 64,000 units instead of 61,000 units in 20X2? A. $39.00 per hour of direct labor B. $37.88 per direct labor hour C. $40.40 per hour of direct labor D. $32.55 per hour of direct labor