(Appendix 3A) Secrease Corporation Uses Machine-Hours as the Allocation Base

(Appendix 3A) Secrease Corporation uses machine-hours as the allocation base for applying its manufacturing overhead.
$\begin{array}{lr}\text { Estimated manufacturing overhead cost for the year } & \$ 594,000 \\\text { Capacity } & 110,000 \text { machine-hours } \\\text { Estimated amount of the allocation base for the year } & 108,000 \text { machine-hours } \\\text { Amount of the allocation base for the actual output } & \\\text { of the year } & \$ 8,000 \text { machine-hours } \\\text { Actual manufacturing overhead cost for the year } & \$ 589,000\end{array}$
All of the company's manufacturing overhead is fixed.
-(Appendix 3A) What is the predetermined overhead rate based on capacity to the nearest whole cent?

A) $5.35
B) $6.69
C) $5.50
D) $5.40

Correct Answer:

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