Reference no: EM132842816

Problem - Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the Earning period are as follows:

Engine parts $789,100

Shop direct labor 576,000

Shop and repair equipment depreciation 42,400

Shop supervisor salaries 117,800

Shop property taxes 21,400

Shop supplies 16,400

Advertising expense 15,800

Administrative office salaries 67,900

Administrative office depreciation expense 8,700

Total costs and expenses $1,655,500

The average shop direct labor rate is $16.00 per hour.

Required - Determine the predetermined shop overhead rate per direct labor hour.