The Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:
|
Engine parts |
$ 650,750 |
|
Shop direct labor |
520,625 |
|
Shop and repair equipment depreciation |
12,800 |
|
Shop supervisor salaries |
93,125 |
|
Shop property tax |
22,300 |
|
Shop supplies |
12,650 |
|
Advertising expense |
18,100 |
|
Administrative office salaries |
61,600 |
|
Administrative office depreciation expense |
8,050 |
|
Total costs and expenses |
$1,400,000 |
The average shop direct labor rate is $17 per hour.
Determine the predetermined shop overhead rate per direct labor hour.