The manufacturing overhead budget at Cardera Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,500 direct labor-hours will be required in January. The variable overhead rate is $8.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $131,100 per month, which includes depreciation of $18,160. All other fixed manufacturing overhead costs represent current cash flows.

The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be:

$20.00 per direct labor-hour

$13.80 per direct labor-hour

$22.30 per direct labor-hour

$8.50 per direct labor-hour