Exotic Engine Shop uses a job order cost system to determine the cost of performing engine...

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Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and e

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Answer 1

Answer #1

Shop direct labor cost = $480,000

Shop direct labor rate = $16 per hour

Shop direct labor hours = Shop direct labor cost/Shop direct labor rate

= 480,000/16

= 30,000

Shop overheads = Shop and repair equipment depreciation + Shop supervisor salaries + Shop property taxes + Shop supplies

= 36,600+101,700+18,500+14,200

= $171,000

Predetermined overhead rate per direct labor hour = Shop overheads / Shop direct labor hours

= 171,000/30,000

= $5.7

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Answer 2

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