Chapter 1 - Introduction to Managerial Accounting Figure 5-3. Mitchell's Softball Gloves Company estimated the following at the beginning of the year: Assembly Department $570,000 142,500 hrs. 32,000 hrs. Total $700,000 175,000 hrs. 97,000 hrs Testing Department $130,000 32,500 hrs. 65,000 hrs. Overhead Direct Labor Hours Machine Hours Mitchell uses departmental overhead rates. In the assembly department, direct overhead. Machine hours are used to apply overhead in the testing department. Actual data for August is as follows: Total $54,000 15,930 hrs. 15,020 hrs. Testing Department $12,000 2,430 hrs. 11,000 hrs. Assembly Department $42,000 13,500 hrs. 4,020 hrs. Overhead Direct Labor Hours Machine Hours 30. Refer to Figure 5-3. If Mitchell uses a plantwide overhead rate based on direct labor hours, instead of departmental rates, what is the predetermined overhead rate rounded to the nearest cent? a. $5 per direct labor hour b. $7.22 per machine hour c. $4 per direct labor hour d. $2.57 per direct labor hour e. $0.52 per direct labor hour