The correct answer is A. $1500 per machine hour.
The cost allocation rate is the amount of overhead cost that is allocated to each machine hour. It is calculated by dividing the total overhead cost by the number of machine hours. In this case, the total overhead cost is $500000 and the number of machine hours is 1000. Therefore, the cost allocation rate is $500000 / 1000 = $1500 per machine hour.
Option B is incorrect because it is the cost allocation rate per unit of product, not per machine hour. Option C is incorrect because it is the total overhead cost, not the cost allocation rate. Option D is incorrect because it is the cost allocation rate per unit of labor, not per machine hour.