TerpsCo allocates its factory overhead based on the traditional method because the production process is labor-intensive. The cost driver for allocating overhead is direct labor hours. During the period, the company produced 5,000 units of Product A requiring a total of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours. What allocation rate should be used if the company incurs overhead costs of $20,000?

Group of answer choices

A. None of these.

B. $2.67 per unit

C. $12.50 per labor hour for Product A and $50 per labor hour for Product B

D. $10 per labor hour