Wolf Manufacturing expects the following overhead costs in 2011:
Indirect material..........$ 45,000
Indirect labor...........$55,000
Depreciation of machinery......$160,000
Repair and maintenance on machinery...$135,000
Utilities and taxes..........$55,000
Total...............$450,000
It expects to use 25,000 direct labor hours at a cost of $525,000 and 15,000 machine hours during the year.
Required:
Justify the selection of an appropriate allocation base, and calculate the predetermined overhead allocation rate.