Hadley Corp. makes hand-crafted wooden rocking horses. The assembly department has a direct labor budget of $150,000. Each horse takes 20 hours to assemble and the budget is based on a production level of 100 horses. In addition to direct costs, there are $75,000 of indirect costs that are part of the assembly department. What is the predetermined departmental rate for the assembly department based on direct labor dollars?

Box 1: Select the best answer