Dodge Company Had the Following Information Assume Machine Hours Are the Cost Driver of Factory Overhead

Dodge Company had the following information:
$\begin{array} { l } \text {Budgeted factory overhead costs }&\$ 90,000\\ \text {Actual factory overhead costs }&\$82,000 \\ \text { Budgeted machine hours}&40,000 \\ \text { Actual machine hours}&35,500 \\\end{array}$

Assume machine hours are the cost driver of factory overhead costs.The budgeted factory overhead rate is ________.

A) $2.025 per machine hour
B) $2.05 per machine hour
C) $2.25 per machine hour
D) $2.875 per machine hour

Correct Answer:

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