The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,600 direct labor-hours will be required in February. The variable overhead rate is $9.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $103,200 per month, which includes depreciation of $18,220. 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

• $19.10 per direct labor-hour

• $21.40 per direct labor-hour

• $9.40 per direct labor-hour

• $12.00 per direct labor-hour