Edson Manufacturing has two different departments working on Job 123, Department A and Department Z. Department A bases their predetermined overhead rate on machine hours while Department Z uses direct labor hours. It is estimated that Department A will use 1,000 machine hours this period and Department Z will use 2,500 direct hours. Variable costs for Department A are expected to be $0.30 per machine hour and $1.40 per direct labor hour for Department Z. Fixed costs for Department A are estimated to be $4,000 and are estimated to be $9,750 for Department Z. What is the predetermined overhead rate for Department A?

• A. $5.40 per machine hour
• B. $3.20 per machine hour
• C. $5.30 per machine hour
• D. $4.30 per machine hour