Question

d Assignment E2-5 (Algo) Calculating Predetermined Overhead Rate and Applied Overhead [LO 2-3) 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. $340, 62, 14e 50 234 549 Bike parte Factory machinery depreciation Factory Supervisor salaries Factory direct labor Factory supplies Factory property tax Advertising cost Adsinstrative salaries Administrative-related depreciation Total expected costs 343,699 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.41 per hour 2. Determine the amount of applied overhead 18.300 actual houts are worked in the upcoming year Complete this question by entering your answers in the tabs below. Required 1 Required 2 age direct laborate is $12.41 per hour (Round Calculate the predetermined overhead rate per direct labor hour if the your answer to 2 decime places inted?)

Answer 1

Solution 1:

Estimated direct labor hours = Estimated direct labor cost / Direct labor rate per hour

= $234,549 / $12.41 = 18900 hours

Estimated overhead = Factory machine depreciation + Factory supervisor salaries + Factory supplies + factory property taxes

= $62,500 + $148,500 + $41,900 + $31,250 = $284,150

Predetermined overhead rate = Estimated overhead / Estimated DL hours = $284,150 / 18900 = $15.03 per labor hour

Solution 2:

Overhead applied = Actual DL hours * Overhead rate = 18300 * $15.03 = $275,049