Minerva Company Has Analyzed Its Overhead Costs and Derived a General

Multiple Choice

Minerva Company has analyzed its overhead costs and derived a general formula for their behavior: $50,000 + $18 per direct labor hour employed. The company expects to use 40,000 direct labor hours during the next accounting period.
What overhead rate per direct labor hour should be applied to jobs worked during the period?

A) $1.25 per direct labor hour
B) $18.00 per direct labor hour
C) $19.25 per direct labor hour
D) $770,000 per direct labor hour
E) None of the above