Answer:
Option (c) is correct.
Explanation:
Given that,
Cost of ordering = $145,000
Cost of machine setup = $319,500
Cost of machining = $1,575,000
Cost of assembly = $1,250,000
Cost of inspection = $325,000
Total estimated overhead:
= Cost of ordering + Cost of machine setup + Cost of machining + Cost of assembly + Cost of inspection
= $145,000 + $319,500 + $1,575,000 + 1,250,000 + 325,000
= $3,614,500
Predetermined overhead rate:
= Total estimated overhead ÷ Estimated direct labor hours
= $3,614,500 ÷ 100,000 hours
= $36.14
