Oldham Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

Multiple Choice

Oldham Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $4.00 per machine-hour and fixed manufacturing overhead cost of $87,822 per period. If the denominator level of activity is 4,100 machine-hours, the fixed component in the predetermined overhead rate would be:

A) $25.42
B) $4.00
C) $21.42
D) $400.00