Question

Wheeler's Bike Company manufactures custom racing bicycles. The company uses a job order cost system to dete each bike. Estimated costs and expenses for the coming year follow: Bike parts Factory machinery depreciation Factory supervisor salaries Factory direct labor Factory supplies Factory property tax Advertising cost Administrative salaries Administrative-related depreciation Total expected costs $338,800 60,000 137,000 196,794 43,400 27,250 19,500 55,000 26, 200 $903,944 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.31 per hou 2. Determine the amount of applied overhead if 18,700 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 $11.31 per hour. (R your answer to 2 decimal places.) Predetermined Overhead Rate per DL. Hour iroda Required 2 > Next >

Answer 1

Predertermined overhead rate per direct labor hour :- Particulars Amount $ Manufacturing Overhead: Factory machine depreciation 60,000 Factory supervisor salaries 1,37,000 Factory supplies 43,400 Factory property tax 27,250 Total manufacturing overhead (A) 2,67,650 Total direct labor hours (196794/11.31) (B) 17,400 Predetermined overhead rate (A/B) 15.38 Applied overhead - Predetermined overhead rate * Direct labor hours worked Applied overhead = (15.38*18700) Applied overhead = $ 287,606/.