Oriole Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2025 are as follows. Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Overhead Cost Pools Inspecting Inventory control (raw materials and finished goods) Utilities Total budgeted overhead costs For the last 4 years, Oriole Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2025, 100,000 machine hours are budgeted. Activity Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Jeremy Nolan, owner-manager of Oriole Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Cost Drivers Number of orders Number of moves Direct labor hours. Number of setups Inspecting Number of inspections Inventory control (raw materials and finished goods) Number of components Utilities Square feet occupied Direct materials (a) Direct labor Machine hours Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of inspections Number of components Number of square feet occupied Your answer is correct. $104,100 $113,000 16,000 5,500 Amount $75,000 82,000 220,000 105,000 Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing development contractor. At Steve's request, Bill prepares cost estimates for producing components for 250 stairways so Steve can submit a contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways. 60 Predetermined overhead rate $ 108,000 126,000 270,000 800 100 450 16,000 $986,000 8,000 Estimated Use of Cost Drivers 600 8,000 100,000 1,250 6,000 168,000 90,000 Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.g. 12.25.) 9.86 per machine hour