The manager budgeted $225,000 in Administration Activity to be allocated on the basis of 32,000 direct labor hours. Required: Compute the cost rate for Administration Activity.
A. $7.03, which means for every direct labor hour used by a product, the company allocates $7.03 to cover Administration costs.B. $0.14, which means for every direct labor hour used by a product, the company allocates $0.14 to cover Administration costs.C. $7.10, which means every direct labor hour used by a product costs the company $7.10 for Administration costs.D. $7.15, which means that each product is allocated $7.15 to cover Administration costs.E. $7.03, which means for every direct labor dollar used by a product, the company allocates $7.03 to cover Administration costs.