The following table details the actual costs and particular data related to Order #501. All the amounts below represent $.

	Department I	Department II
Materials Purchased	66,000	106,500
DM Used	19,500	8,100
Direct Labor	31,500	32,100
Indirect Labor	6,600	5,400
Indirect Materials Used	4,500	2,850
Renting	9,750	2,250
Utilities	600	750

The Corporation SCOTUS produced sports clothes that protect against sun rays and maintains body temperature in healthy levels even in extreme climate conditions.

The Departments I and II budgeted their indirect costs of manufacturing during May 2021 over the base of 10,000 hours of machinery and 5,000 direct labor hours. The indirect costs of the manufacturing budgeted for Department I and Department II were $34,500 and $37,500, respectively.

SCOTUS uses a cost system per order based on normal cost. The order #1128 used 1,000 machinery hours in Department I and 300 direct labor hours in Department II.

Calculate the indirect cost allocation rate for Department I.

a. $7.50

b. $3.75

c. $6.90

d. $3.45