Wall Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company's estimated costs for the next year are:
Direct materials $ 4,500
Direct labor $30,000
Depreciation on factory equipment $ 9,000
Rent on factory $18,000
Sales salaries $43,500
Factory utilities $22,500
Indirect labor $ 9,000
It is estimated that 10,000 direct labor hours will be worked during the year. The predetermined overhead rate will be:
a) $10.20.
b) $ 5.85.
c) $13.65.
d) $ 8.85.