The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,500 direct labor-hours will be required in February. The variable overhead rate is $8.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $110,250 per month, which includes depreciation of $18,040. All other fixed manufacturing overhead costs represent current cash flows.

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

Multiple Choice

• $14.70 per direct labor-hour

• $21.30 per direct labor-hour

• $8.90 per direct labor-hour

• $23.60 per direct labor-hour