Westminster Manufacturing Company Has Two Support Activities and Two Line

Multiple Choice

Westminster Manufacturing Company has two support activities and two line activities.The following data pertain to usage patterns for the support and line activities: $\begin{array}{lrrrr}&\text { Support Activities} &&\text { Line Activities }\\\hline&\text { Maintenance} &\text { human Resources} &\text { Activity A } &\text {Activity B }\\\hline\text { Costs } & \$ 40,000 & \$ 20,000 & \$ 100,000 & \$ 200,000 \\\text { Square Footage Used } & 300 & 400 & 1,000 & 3,000 \\\text { Number of Employees } & 10 & 20 & 100 & 150 \\\text { Direct Labor Hours } & & & 2,000 & 4,000\end{array}$ The costs of Maintenance are allocated based on square footage used.Human Resources costs are allocated based on number of employees.Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours.If the company uses the direct method of allocating support activities to line activities, what is the predetermined overhead rate for Activity B?

A) $50
B) $60
C) $60.50
D) $10
E) None of the above.