The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,800 direct labor-hours will be required in February. The variable overhead rate is $8.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $141,120 per month, which includes depreciation of $18,130. 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

• $14.40 per direct labor-hour

• $20.30 per direct labor-hour

• $8.20 per direct labor-hour

• $22.60 per direct labor-hour