The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 1,600 direct labor-hours will be required in February. The variable overhead rate is $3.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $28,320 per month, which includes depreciation of $3,680. 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:
A. $18.80 per direct labor-hour
B. $17.70 per direct labor-hour
C. $3.40 per direct labor-hour
D. $21.10 per direct labor-hour
Answer: D
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