Stopher Incorporated makes a single product-a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted variable manufacturing overhead$45,220 Budgeted production (a) 20,000unitsStandard hours per unit (b) 1.90machine-hoursBudgeted hours (a) × (b) 38,000machine-hours Actual production (a) 21,000unitsStandard hours per unit (b) 1.90machine-hoursStandard hours allowed for the actual production (a) × (b) 39,900machine-hours Actual variable manufacturing overhead$66,789 Actual hours 36,900machine-hoursThe variable component of the
predetermined overhead rate is closest to:
A. $1.81 per machine-hour
B. $1.19 per machine-hour
C. $1.76 per machine-hour
D. $1.67 per machine-hour
Answer: B
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