Arca Incorporated makes a single product-a critical part used in commercial airline seats. 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 (Planned) Overhead:    Budgeted variable manufacturing overhead$38,700  Budgeted fixed manufacturing overhead 170,700  Total budgeted manufacturing overhead$209,400       Budgeted production (a) 20,000units Standard hours per unit (b) 1.50machine-hours Budgeted hours (a) × (b) 30,000machine-hours      Applying Overhead:    Actual production (a) 15,000units Standard hours per unit (b) 1.50machine-hours Standard hours allowed for the

actual production (a) × (b) 22,500machine-hours      Actual Overhead and Hours:    Actual variable manufacturing overhead$9,812  Actual fixed manufacturing overhead 185,700  Total actual manufacturing overhead$195,512  Actual hours 22,300machine-hours ?The fixed component of the predetermined overhead rate is closest to:

A. $8.54 per machine-hour
B. $8.25 per machine-hour
C. $12.38 per machine-hour
D. $5.69 per machine-hour


Answer: D

Business

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