Landon Corporation Wishes to Develop a Single Predetermined Overhead Rate

Multiple Choice

Landon Corporation wishes to develop a single predetermined overhead rate.The company's expected annual fixed overhead is $340,000 and its variable overhead cost per machine hour is $2.The company's relevant range is from 200,000 to 600,000 machine hours.Landon expects to operate at 425,000 machine hours for the coming year.The plant's theoretical capacity is 850,000.The predetermined overhead rate per machine hour should be

A) $2.40.
B) $2.57.
C) $2.80.
D) $2.85.