The controller for Jacks Rabbits, Inc., estimates that the companys fixed overhead is $150,000 per year. He also has determined that the variable overhead is approximately $0.20 per rabbit raised and sold. Since the company has a single product, overhead is applied on the basis of output units, or in other words, rabbits raised and sold.

What is the predetermined overhead rate per rabbit if the output estimate or prediction is 150,000 rabbits?

a. $0.20

b. $0.50

c. $1.00

d. $1.20

e. Cannot be determined without additional information