Sheffield Corp. provided the following information from its accounting records for 2017.

Expected production	40000 labor hours
Actual production	36000 labor hours
Budgeted overhead	$900000
Actual overhead	$860000

How much is the overhead application rate if Sheffield Corp. bases the rate on direct labor hours?

$21.50 per hour

$25.00 per hour

$22.50 per hour

$23.89 per hour