Chojnowski Incorporated makes a single product-a cooling coil used in commercial refrigerators. 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$82,450 Budgeted fixed manufacturing overhead 325,975 Total budgeted manufacturing overhead$408,425 Budgeted production (a) 25,000units Standard hours per unit (b) 1.70labor-hours Budgeted hours (a) × (b) 42,500labor-hours Applying Overhead: Actual production (a) 20,000units Standard hours per unit (b) 1.70labor-hours Standard hours allowed for the actual
production (a) × (b) 34,000labor-hours Actual Overhead and Hours: Actual variable manufacturing overhead$74,812 Actual fixed manufacturing overhead 312,975 Total actual manufacturing overhead$387,787 Actual hours 31,700labor-hours ?The predetermined overhead rate is closest to:
A. $11.41 per labor-hour
B. $16.34 per labor-hour
C. $9.61 per labor-hour
D. $19.39 per labor-hour
Answer: C
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