Wendy Wall (WW) Makes Wall Units

Multiple Choice

Wendy Wall (WW) makes wall units. For the year, the following details have been budgeted. Output, 10,000 units; factory overheads $1,250,000, of which 60% is variable. Each wall unit should take 2.5 hours of direct labor to produce. WW produced 9,500 units with 24,000 DLH used and $1,175,000 actual overhead was incurred. Overhead is allocated based on direct labor hours (DLH) . What is the correct overhead absorption rate (to nearest cent) ?

A) $52.63
B) $50.00
C) $49.47
D) $47.00
E) None of the above