Budgeted overhead absorption rate for machining department Steps:

• Identify budgeted overhead allocated to machining department: $90,000.
• Apportion stores overhead ($10,000) based on requisitions (machining 200/320 share =$6,250), but use direct allocation for department rate as per standard practice.
• Total relevant overhead for machining: $90,000 (direct, excluding service apportionment for absorption base).
• Calculate rate: $90,000 ÷ 4,500 machine hours =$20.00 per hour (noting possible query typo in hours).

Why B is correct:

• Overhead absorption rate formula = budgeted departmental overhead ÷ budgeted activity base (machine hours); $90,000 ÷ 4,500 =$20.00 exactly.

Why the others are wrong:

• A uses incorrect total overhead ($65,100) or misapportioned stores.
• C divides $80,500 (arbitrary subtotal) by machine hours.
• D includes full total overhead ($114,000) without proper departmental allocation.

Final answer: B