Reference no: EM132475880

Predetermined Factory Overhead Rate

Spring Street 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                                                  $838,400

Shop direct labor                                             612,000

Shop and repair equipment depreciation               32,400

Shop supervisor salaries                                   90,000

Shop property tax                                           16,300

Shop supplies                                                 12,500

Advertising expense                                         16,800

Administrative office salaries                             72,100

Administrative office depreciation expense           9,200

Total costs and expenses                          $1,699,700

• The average shop direct labor rate is $17 per hour.

Question 1: Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.

1. $ per direct labor hour