Reference no: EM132817195

Problem - The following cost data pertains to GHI Inc. for December 31st, 2019:

Beginning Work-in-Process: $20,000

Ending Work-in-Process: $10,000

Direct Materials Used: $40,000

Direct Costs Incurred in Production: $60,000

Actual Indirect costs incurred in Production: $76,000 ($36,000 of which is fixed)

Beginning Finished Goods Inventories: $80,000

Ending Finished Goods Inventories: $40,000

Budgeted Fixed Factory Overhead was $40,000 based on an expected activity level of 10,000 hours. During the period, GHI employees worked a total of 8,000 direct labour hours: GHI uses a job-order costing system and applies overhead costs using direct labour hours. What was GHI's predetermined overhead rate (POHR)?

a. $4 per direct labour hour

b. $4.50 per direct labour hour

c. $5 per direct labour hour

d. $4.67 per direct labour hour