Vandelay Company uses a predetermined overhead rate based on…

Vandelay Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:     Direct materials $25,000   Direct labor 22,000   Advertising expense 15,000   Rent on factory building 13,500   Utilities (e.g. electric bill) on factory building 6,500   Indirect materials 10,000   Sales salaries 28,000   Insurance on factory equipment 10,000             Vandelay estimated that 40,000 machine hours would be worked during the year. Based on the costs above relevant to manufacturing overhead, the predetermined overhead rate per machine hour will be: