Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed:Number of units in the job40Total direct labor-hours80Direct materials$950Direct labor cost$2,720The predetermined overhead rate is closest to:
A. $7.10 per direct labor-hour
B. $2.40 per direct labor-hour
C. $11.90 per direct labor-hour
D. $9.50 per direct labor-hour
Answer: D
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