The Manufacturing Overhead Budget at Cardera Corporation Is Based on Budgeted

Multiple Choice

The manufacturing overhead budget at Cardera Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,300 direct labor-hours will be required in January. The variable overhead rate is $1.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $28,060 per month, which includes depreciation of $4,600. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be:

A) $1.00 per direct labor-hour
B) $12.20 per direct labor-hour
C) $11.20 per direct labor-hour
D) $13.20 per direct labor-hour