Question - Billings Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
Cost Pool Overhead costs Cost driver Activity level
Supervision of direct labor $840,000 Direct labor - hours 950,000
Machine maintenance. $135,000 Machine - hours 990,000
Facility rent $212,000 Square feet of area 150,000
Total overhead costs $1,187,500
The accounting records show the Houston Job consumed the following resources:
Cost driver Actual level
Direct labor - hours 220
Machine - hours 1,518
Square feet of area 80
If direct labor - hours are considered the only overhead cost driver, what is the single cost driver rate for Billings?
A. $0.88 per direct labor - hour
B. $1.13 per direct labor - hour
C. $.080 per direct labor hour
D. $1.25 per direct labor - hour