Lewis Company Manufactures Two Models of Pens, a Standard and a Deluxe

Multiple Choice

Lewis Company manufactures two models of pens, a standard and a deluxe model.Three activities have been identified as cost drivers and the related overhead costs pooled together to arrive at the following information: $\begin{array}{cccc} & \begin{array}{c}\text { Number } \\\text { of }\end{array} & \begin{array}{c}\text { Number } \\\text { of }\end{array} & \begin{array}{c}\text { Number } \\\text { of }\end{array} \\\text { Product } & \text { Setups } & \text { Components } & \text { DLH }\\\hline\text { Standard } & 20 & 15 & 375 \\\text { Deluxe } & 30 & 45 & 225 \\& & & \\\text { Costs per pool } & \$ 25,000 & \$ 36,000 & \$ 15,000\end{array}$ If a traditional costing system is used, _____ is the overall overhead rate using direct-labor hours.

A) $500
B) $150
C) $60
D) $127