Tungsten, Inc Calculate the Predetermined Overhead Allocation Rate

Multiple Choice

Tungsten, Inc. manufactures both normal and premium tube lights. The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base. Estimated overhead costs for the year are $102,000. Additional estimated information is given below. $$\begin{array} { | l | r | r | } \hline & \text { Normal } & \text { Premium } \\\hline \text { Machine hours (MHr) } & 24,000 & 39,000 \\\hline \text { Direct materials } & \$ 51,000 & \$ 480,000 \\\hline\end{array}$$ Calculate the predetermined overhead allocation rate. (Round your answer to the nearest cent.)

A) $4.25 per direct labor hour
B) $1.62 per machine hour
C) $2.62 per machine hour
D) $0.19 per direct labor hour