Blossom Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are made of white oak wood.

The company's budgeted manufacturing overhead costs for 2022 are as follows:

Overhead Cost Pools

Amount

Purchasing

$68,000

Handling materials

81,000

Production (cutting, milling, finishing)

204,000

Setting up machines

95,000

Inspecting

96,000

Inventory control (raw materials and finished goods)

126,000

Utilities

180,000

Total budget overhead costs

$850,000

For the past four years, Blossom has been charging overhead to products on the basis of machine hours. For 2022, it has budgeted 100,000 machine hours.

Daniel Jackson, owner-manager of Blossom, recently directed her accountant, Nancy White, to implement the activity-based costing system that she has repeatedly proposed. At Daniel's request, Nancy and the production foreperson identify the following cost drivers and their usage for the previously budgeted overhead cost pools.

Activity Cost Pools

Purchasing

Handling materials

Production

(cutting, milling, finishing)

Setting up machines

Inspecting

Inventory control

(raw materials and finished goods)

Utilities

Cost Drivers

Number of orders

Number of moves

Estimated Use of

Cost Drivers

800

9,000

Direct labour hours

Number of set-ups

Number of inspections

102,000

1,250

6,000

Number of components

Square metres occupied

168,000

10,000

Mark Dion, sales manager, has received an order for 280 stairways from Penny Worth Builders Inc., a large housing development contractor. At Mark's request, Nancy prepares cost estimates for producing components for 280 stairways so Mark can submit a contract price per staircase to Penny Worth Builders. She accumulates the following data for the production of 280 stairways:

Direct materials

Direct labour

$103,600

112,000 Machine hours

Direct labour hours

Number of purchase orders

Number of material moves

Number of machine set-ups

Number of inspections

Number of components

Number of square metres occupied

112,000

14,500

5,000

60

800

100

450

16,000

800

(a)

Calculate the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.g. 15.25.)

Predetermined overhead rate $________

per machine hour.?