On December 31, there were 61 units remaining in ending inventory. These 61 units consisted of 9 from January, 11 from February, 13 from May, 11 from September, and 17 from November. Using the specific identification method, what is the cost of the ending inventory?

b. $30.00 per hour

Explanation:

Overhead application rate = Budgeted Overhead / Budgeted Activity

                                            = $900,000 / 30,000  labor hours

                                            = $30 per direct labor hour

Conclusion :

The overhead application rate is $30.00 per hour.