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 $106,000.Additional estimated information is given below. $$\begin{array} { | l | r | r | } \hline & \text { Normal } & \text { Premium } \\\hline \text { Machine hours (MHr) } & 21,000 & 38,000 \\\hline \text { Direct materials } & \$ 60,000 & \$ 500,000 \\\hline\end{array}$$ Calculate the predetermined overhead allocation rate.(Round your answer to the nearest cent.)

A) $5.05 per direct labor hour
B) $1.80 per machine hour
C) $2.79 per machine hour
D) $0.19 per direct labor hour