The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,900 direct labor-hours will be required in May. The variable...

Extracted text: The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,900 direct labor-hours will be required in May. The variable overhead rate is $7.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $138,690 per month, which includes depreciation of $24,880. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: Multiple Choice $7.40 $27.50 $24.00 $20.10