5 Demco Berhad produces a single product and used flexible budgetary control system as part of company's planning. The company assigns the manufacturing overhead costs to production on the basis of machine hours. Below is part of the budgeted overhead cost based on machine hours:

Capacity 80% 100%

Machine hours 40,000 50,000

Maintenance RM34,000 RM46,000

Supplies RM28,000 RM30,000

During April 2020, the company operated at 85% of machine hours and the actual overhead cost for maintenance and supplies are RM38,750 and RM26,375 respectively. The maintenance cost is a semi variable where there is a step up cost of RM5,000 in the fixed cost element for volumes in excess of 40,000 machine hours. The actual fixed costs remains as budgeted.

Calculate the variable cost per machine hour for maintenance cost above.

A. RM0.20 per machine hour

B. RM0.60 per machine hour

C. RM0.70 per machine hour

D. RM1.20 per machine hour