The Following Information for the Past Year Is Available from Thinnews

question 133

Multiple Choice

The following information for the past year is available from Thinnews Co., a company that uses machine hours to apply standard factory overhead cost to outputs: $\begin{array}{lrr}\text { Actual total factory overhead cost incurred } & \$ 24,000 \\\text { Actual fixed overhead cost incurred } & \$ 10,000 \\\text { Budgeted fixed overhead cost } & \$ 11,000 \\\text { Actual machine hours } & 5,000 \\\text { Standard machine hours allowed for the units manufactured } & 4,800 \\\text { Denominator volume-machine hours } & 5,500 \\\text { Standard variable overhead rate per machine hour } & \$ 3.00\end{array}$ The standard fixed overhead application rate, to two (2) decimal places, is:

• A) $1.00 per machine hour.
• B) $2.00 per machine hour.
• C) $3.00 per machine hour.
• D) $4.00 per machine hour.
• E) $5.00 per machine hour.