Aaron Company Estimates Direct Labor Costs and Manufacturing Overhead Costs

Aaron Company estimates direct labor costs and manufacturing overhead costs for the coming year to be $800,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 10,000 hours, respectively. What is the predetermined overhead allocation rate?

A) $80.00 per machine hour
B) $31.25 per labor hour
C) $81.25 per labor hour
D) $50.00 per machine hour