Question

Wheeler's Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming year follow: Bike parts Factory machinery depreciation Factory supervisor salaries Factory direct labor $345,800 61,000 143,000 232,380 41,400 32,750 Factory supplies Factory property tax Advertising cost 22,000 52,500 18,700 Administrative salaries Administrative-related depreciation $949,530 Total expected costs Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.91 per hour. 2. Determine the amount of applied overhead if 19,100 actual hours are worked in the upcoming year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.91 per hour. (Round your answer to 2 decimal places.) Predetermined Overhead Rate per DL Hour Required 2 Required 1

Answer 1

1)

Factory machinery depreciation	61000
Factory supervisor salaries	143000
Factory supplies	41400
Factory property tax	32750
Total estimated overhead cost	278150
Estimated direct labor hours [232380/12.91]	18000
Overhead rate per direct labor hour [278150/18000]	$ 15.45 per direct labor hours

2)

Amount of applied overhead =Actual direct labor hours *overhead rate

                         = 19100 * 15.45

                        = $ 295095