Tarrant Corporation has two manufacturing departments-Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: CastingFinishingTotalEstimated total machine-hours (MHs) 1,000 4,000 5,000Estimated total fixed manufacturing overhead cost$5,700$11,200$16,900Estimated variable manufacturing overhead cost per MH$1.30$2.90 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to:
A. $1.30
B. $7.00
C. $5.70
D. $5.96
Answer: B
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