Moonrays,Inc Calculate the Predetermined Overhead Allocation Rate

Multiple Choice

Moonrays,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 $108,000.Additional estimated information is given below. $$\begin{array} { | l | r | r | } \hline & \text { Normal } & \text { Premium } \\\hline \text { Machine hours (MHr) } & 29,000 & 48,000 \\\hline \text { Direct materials } & \$ 58,000 & \$ 440,000 \\\hline\end{array}$$ Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent. )

A) $3.72 per direct labor hour
B) $1.40 per machine hour
C) $2.25 per machine hour
D) $0.22 per direct labor hour