Gratis Company Ltd Applies Overhead Based on Direct Labour Hours

Gratis Company Ltd applies overhead based on direct labour hours in their printing department. At the beginning of the year, the company estimated that manufacturing overhead would be $550 000, direct labour hours would be 100 000 and direct labour cost would be $1 100 000 in the printing department. What is the printing department's predetermined overhead rate for the year?

A) $0.18 per direct labour hour
B) $0.50 per direct labour hour
C) $2.00 per direct labour hour
D) $5.50 per direct labour hour

Correct Answer:

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