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 predetermined overhead rate for Department 2?

A) $3.45
B) $3.75
C) $4.60
D) $7.50