The casual furniture company estimates that 10000 direct

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The Casual Furniture Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

Lumber .................................................................... $ 25,000

Paint ................................................................ 1,000

Glue ................................................................ 500

Wages - Assembly personnel ................................... 100,000

Wages - Plant supervisor ........................................ 40,000

Sales salaries ....................................................... 18,000

Depreciation - factory equipment ............................... 16,500

Depreciation - sales office equipment 10,000

Utilities, insurance, property taxes - factory ................... 12,000

Utilities, insurance, property taxes - sales office ............... 8,000

Advertising ........................................................... 15,000

Rent on factory building ............................................ 30,000

Total costs ...................................................... $276,000

The Casual Furniture Company estimates that 10,000 direct labor hours will be worked during the year. The predetermined overhead rate per hour will be:

Reference no: EM13586892

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