CR Company Has the Following Estimated Costs for the Next

question 6

Multiple Choice

CR Company has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ CR Company estimates that 20,000 labour hours will be worked during the year. If overhead is applied on the basis of direct labour hours, the overhead rate per hour will be?

• A)$4.70.
• B)$3.25.
• C)$2.25.
• D)$3.45.