Applied overhead in a bank. First Bank of Newcastle uses machine time as the basis for allocating overhead to its check processing activities. On January 1, First Bank estimated that production for the coming year would equal 800 million units. It also estimated that total overhead for the same year would equal $8,000,000 and that estimated machine time would equal 100,000 hours. The units produced and machine time for the four quarters follow:

a. Compute the predetermined overhead rate for applying overhead on the basis of machine hours.

b. Compute the amount of total overhead applied under normal costing for each quarter.

c. Compute the overhead cost per unit (that is, per check processed) tor each quarter using normal costing.

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Quarter 1st 300 Checks 2nd 300 Checks Actual Units of Production (in millions) Actual Machine Time 32.000 Hours 30,000 Hours 3rd 200 Checks 18,000 Hours 4th 100 Checks 12,000 Hours