Theory Enterprises uses a standard cost system and prepared the following budget for May when 22,000 machine hours of activity were anticipated: variable overhead, $81,400; fixed overhead: $550,000. Actual data for May were: Standard machine hours allowed for output attained: 23,000 Actual machine hours worked: 22,000 Variable overhead incurred: $85,100 Fixed overhead incurred: $575,000 The standard variable overhead rate for May is:

Multiple Choice

• $3.70.

• $3.87.

• $4.70.

• $6.76.

• $7.06.