Odds and Sodds Company, a Local Furniture Manufacturer Applies Its

Multiple Choice

Odds and Sodds Company, a local furniture manufacturer applies its manufacturing overhead to products based on direct labour hours. The Company estimates that fixed overhead will be $100,000 per year, variable overhead will be $1.00 per direct labour hour and the estimated total direct labour hours will be 40,000 per year. On the basis of this information, the Company's predetermined overhead rate will be.

A) $0.29 per direct labour hour.
B) $0.40 per direct labour hour.
C) $2.50 per direct labour hour.
D) $3.50 per direct labour hour.
E) $4.50 per direct labour hour.