The relevant range of operations is a range of volume neither close to zero nor at maximum capacity.

True or False

Tasty Bakery produces donuts which go through two operations, mixing and baking, before they are ready to be packaged. Next years expected costs and activities are shown below.

	Mixing			Baking
Direct labor hours	300,000	DLH		70,000	DLH
Machine hours	1,000,000	MH		800,000	MH
Overhead costs	$500,000			$400,000

Compute Tasty's departmental overhead rate for the mixing department based on direct labor hours.

Multiple Choice

$1.50 per DLH.

$5.00 per DLH.

$0.75 per DLH.

$0.60 per DLH.

$1.67 per DLH.