California Company uses a predetermined overhead rate based on machine hours to apply overhead. The company has the following estimated costs for next year:

Direct materials: 10,000
Direct labour: 30,000
Sales commissions: 40,000
Salary of production supervisor: 20,000
Indirect materials: 4000
Advertising expense: 8000
Rent on factory equipment: 10000

California Company estimates that 10,000 machine hours will be worked during the year. The predetermined overhead rate per machine hour will be:__________