Fredin Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted (Planned) Overhead: Budgeted variable manufacturing overhead$80,400 Budgeted fixed manufacturing overhead 185,700 Total budgeted manufacturing overhead $ 266,100 Budgeted production (a) 15,000unitsStandard hours per unit (b) 2.00labor-hoursBudgeted hours (a) × (b) 30,000labor-hoursThe variable component of the predetermined overhead rate is closest to:
A. $2.68 per labor-hour
B. $2.93 per labor-hour
C. $2.41 per labor-hour
D. $3.02 per labor-hour
Answer: A
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