For 2018, Winters Manufacturing Uses Machine-Hours as the Only Overhead

Multiple Choice

For 2018, Winters Manufacturing uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $2.00 per unit. The selling price of the product is $27.00. The estimated manufacturing overhead costs are $220,000 and estimated 20,000 machine hours. The actual manufacturing overhead costs are $225,000 and actual machine hours are 25,000. What is the profit margin earned if each unit requires two machine-hours?

A) 45.00%
B) 25.93%
C) 50.00%
D) 90.00%