Use the Information Below to Answer the Following Question(s)

Multiple Choice

Use the information below to answer the following question(s) .Jim's Computer Products manufactures keyboards for computers.In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively.For Job 501, the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production.
-What is the budgeted indirect cost allocation rate for Department 1?

A) $3.45 per hour
B) $3.75 per hour
C) $6.90 per hour
D) $7.50 per hour
E) $8.00 per hour