Question: 7. Rainbow Co use direct machine hour rate to absorb production overheads. Last month budget direct machine hour was 12,000 hours. During the May, the

7. Rainbow Co use direct machine hour rate to absorb production overheads. Last month budget direct machine hour was 12,000 hours. During the May, the actual direct machine hour was 12,500 hours, actual production overhead expenditure was $64,500 and under absorbed overheads $2000. What was overhead absorption rate?

A.$5

B.$5.16

C.$5.32

D.$5.21

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