The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Overhead Costs Variable cost Fixed cost Total overhead cost Cost Formula (per machine- hour) $ 1.85 Machine-Hours 6,500 12,025 19,500 31,525 7,500 13,875 19,500 33,375 8,500 15,725 19,500 35,225 The following information is available for a recent period: The denominator activity of 6,500 machine-hours was chosen to compute the a. predetermined overhead rate. At the 6,500 standard machine-hours level of activity, the company should produce 1,300 b. units of product. c. The company's actual operating results were as follows: Number of units produced Actual machine-hours Actual variable overhead costs Actual fixed overhead costs 1,600 7,800 $ 14,000 $25,000