Olthof Unlimited Company has determined that $2,500,100 of its total manufacturing overhead costs related to unit-level activities like electricity costs for running the manufacturing equipment and equipment maintenance costs. Olthof Unlimited allocates these costs over the individual units of production based on machine hours. Using the following expected machine hours for the company’s three divisions that all make the same product,

(1) Determine the manufacturing overhead rate per machine hour and

(2) Allocate the manufacturing overhead to each division.

Division A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 hours

Division B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000

Division C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000