[mslaurayee]

The following data were taken from the records of a manufacturing company. The company has been calculating the actual indirect cost rate using direct labor hours as the allocation base. Calculate the rate using machine hours as the allocation base.

Actual total indirect costs $1,152,000
Budgeted total indirect costs $1,216,000
Actual direct labour costs $3,200,000
Actual direct labour rate $50 per hour
Actual machine hours 300,000 hours
# Of employees 32


a) $60.67
b) $4.05
c) $10.67
d) $7.89
e) $3.84

Can someone help me out I believe the answer is e but not so sure. Is the correct formula looking for machine hours is: indirect cost / by the hours = machine hours .

Thanks guys