The following information pertains to Charter Company:
Service Depts
Personnel
Budgeted overhead: $80,000
Direct labor hours: 4,000
Machine hours: 0
Number of employees: 8
Maintenance
Budgeted overhead: $144,000
Direct labor hours: 5,000
Machine hours: 0
Number of employees: 10
Producing Departments
Fabrication
Budgeted overhead: $280,000
Direct labor hours: 16,000
Machine hours: 24,000
Number of employees: 30
Assembly
Budgeted overhead: $320,000
Direct labor hours: 20,000
Machine hours: 16,000
Number of employees: 50
Charter does not divide costs into fixed and variable cost components. Personnel costs are allocated based on the number of employees and maintenance costs are based on machine hours. Predetermined overhead rates for Fabrication and Assembly are based on direct labor hours. (Round amounts to dollars) If the direct method is used to allocate service department costs, the predetermined overhead rate for the Fabrication Department (rounded to 2 decimal places) would be:
A. $16.00
B. $21.38
C. $22.89
D. $24.78