Reference no: EM132482600

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.