What the overhead rate per hour will be

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Reference no: EM132811998

CR Company has the following estimated costs for the next year:

Direct materials $4,000

Direct labour 20,000

Rent on factory building 15,000

Sales salaries 25,000

Depreciation on factory equipment 8,000

Indirect labour 10,000

Production supervisor's salary 12,000

Problem 1: CR Company estimates that 20,000 labour hours will be worked during the year. If overhead is applied based on direct labour hours, the overhead rate per hour will be?

Option 1: $3.25.

Option 2: $2.25.

Option 3: $3.45.

Option 4: $4.70.

Reference no: EM132811998

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