Johansen Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for the next year:

Direct materials $ 6,000
Direct labor 20,000
Rent on factory building 15,000
Sales salaries 25,000
Depreciation on factory equipment 8,000
Indirect labor 12,000
Production supervisor's salary 15,000

Johansen estimates that 20,000 direct labor hours will be worked during the year. The predetermined overhead rate per hour will be:

12,000/20,000 = 0.60