If Oriel Company budgets total overhead costs for the next year of $50,000 and anticipates using machine hours as the overhead allocation base, which of the following statements is true?
If Oriel Company expects to use 100,000 machine hours, the predetermined overhead rate is $2. 00 per machine hour.
If Oriel Company expects to use 75,000 machine hours, the predetermined overhead rate is $1. 50 per machine hour.
If Oriel Company expects to use 25,000 machine hours, the predetermined overhead rate is $2. 00 per machine hour.
Machine hours cannot be used to calculate the predetermined overhead rate.