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The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,300 direct labor-hours will be required

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,300 direct labor-hours will be required in February. The variable overhead rate is $9.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $106,020 per month, which includes depreciation of $18,210. 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

  • $9.90 per direct labor-hour

  • $19.00 per direct labor-hour

  • $11.40 per direct labor-hour

  • $21.30 per direct labor-hour

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