Strong Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, direct labour hours would total 50,000, and machine hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:

$10 per machine hour.

$0.04 per machine hour.

$25 per machine hour.

$0.05 per machine hour.

$20 per machine hour.