Rhoden LLC uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The LLC has provided the following estimated costs for the next year:

Direct materials	$	6,000
Direct labor	$	20,000
Rent on factory building	$	15,000
Sales salaries	$	25,000
Depreciation on factory equipment	$	8,000
Indirect labor	$	12,000
Production supervisor's salary	$	15,000

Rhoden LLC estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:

Garrison 16e Rechecks 2017-08-01

Multiple Choice

• $2.50 per direct labor-hour

• $2.79 per direct labor-hour

• $3.00 per direct labor-hour

• $4.00 per direct labor-hour