FrontGrade’s standard variable manufacturing overhead allocation rate is

a. $5.00 per machine hour.

b. $5.50 per machine hour.

c. $7.50 per machine hour.

d. $12.50 per machine hour.

FrontGrade Systems allocates manufacturing overhead based on machine hours. Each connector should require 11 machine hours. According to the static budget, FrontGrade expected to incur the following:
1,100 machine hours per month (100 connectors × 11 machine hours per connector) $5,500 in variable manufacturing overhead costs $8,250 in fixed manufacturing overhead costs
During August, FrontGrade actually used 1,000 machine hours to make 110 connectors and spent $5,600 in variable manufacturing costs and $8,300 in fixed manufacturing overhead costs.