Michael & Co

Multiple Choice

Michael & Co. expects overhead costs of $60,000 per month and direct production costs of $24 per unit. The estimated production activity for the 2013 accounting period is as follows: The predetermined overhead rate based on units produced is (rounded to the nearest penny) is:

A) $1.50 per unit.
B) $2.67 per unit.
C) $18.00 per unit.
D) $42.00 per unit.