Kris Company calculates its predetermined rates using practical volume, which is 300,000 units The standard cost system allows 3 direct labor hours per unit produced Overhead is applied using direct labor hours The total budgeted overhead is $567,000 of which $ 252,000 is fixed overhead The actual results for the year are as follows Units produced 28,000 Direct Lobar 86,800 hours 12 hour Variable overhead 308,140 Fixed overhead 241,304 The predetermined variable overhead rate is (Round to nearest decimal) a $2 80 per direct labor hour b $3 50 per direct labor hour c $2 78 per direct labor hour d $3 55 per direct labor hour e None of these choices are correct

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Question: Kris Company calculates its predetermined rates using practical volume, which is 300,000 units. The standard cost system allows 3 direct labor hours per unit produced.

Kris Company calculates its predetermined rates using practical volume, which is 300,000 units. The standard cost system allows 3 direct labor hours per unit produced. Overhead is applied using direct labor hours. The total budgeted overhead is $567,000 of which $ 252,000 is fixed overhead. The actual results for the year are as follows

Units produced	28,000
Direct Lobar	86,800 hours @ 12/hour
Variable overhead	308,140
Fixed overhead	241,304

The predetermined variable overhead rate is (Round to nearest decimal):

a. $2.80 per direct labor hour.

b. $3.50 per direct labor hour.

c. $2.78 per direct labor hour.

d. $3.55 per direct labor hour.

e. None of these choices are correct.

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