A Machine Shop Has Direct Materials Cost of $1,800,000 Direct

Multiple Choice

A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour) and budgeted indirect manufacturing costs of $850,000.Management believes that indirect manufacturing costs increase with direct labour hours.What is the budgeted indirect manufacturing cost rate?

A) $2.12
B) $2.33
C) $4.94
D) $10.12
E) $17.00