Biology Forums - Study Force

Steele Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. Steele Corporation has provided the following estimated costs for next year:

Direct materials	$ 20,000
Direct labor	$ 60,000
Sales commissions	$ 80,000
Salary of production supervisor	$ 40,000
Indirect materials	$ 8,000
Advertising expense	$ 16,000
Rent on factory equipment	$ 20,000

Steele estimates that 10,000 direct labor-hours and 16,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

▸ $4.25

▸ $8.00

▸ $9.00

▸ $10.25

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