CR Company Has the Following Estimated Costs for the Next

Multiple Choice

CR Company has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ CR Company estimates that 20,000 labour hours will be worked during the year. If overhead is applied on the basis of direct labour hours, the overhead rate per hour will be?

A) $4.70.
B) $3.25.
C) $2.25.
D) $3.45.