Question - The managers of Red Heart Draperies are planning for the upcoming year. In years past, the company has applied overhead based on direct labor costs. However, management believes that direct labor hours are a better basis for applying overhead and plans to use direct labor hours to apply overhead for the upcoming year.
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Estimated overhead for upcoming year
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$978,850
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Estimated direct labor hours for upcoming year
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44,860
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Estimated direct labor cost for upcoming year
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$834,396
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What is the predetermined overhead rate for the upcoming year(round all answers to the nearest cent)?
A- $1.17/DLH
b- $18.60/DLH
c- $21.82/DLH
d- $.85/DLH