Calico Company costs its products using a normal costing system. Overhead is applied on the basis of machine hours. The following information is available for last year:

Budget Actual

Overhead............................. $525,000 $497,500

Machine hours..................... 50,000 48,000

Direct labor hours................ 75,000 72,000

Prime cost (Direct Material and Direct Labour) $561,750

Units produced.................... 175,000

What is the overhead rate per machine hour?

Question 4Answer

a.

$10.55

b.

$11.50

c.

$10.50

d.

$9.75

Clear my choice