Reference no: EM131802932

Problem - Analysis of cost flows

As of the end of June, the job cost sheets at Racing Wheels, Inc. show the following total costs accumulated on three custom jobs:

Job 102 Job 103 Job 104

Direct materials........................ $30,000 $66,000 $54,000

Direct labor............................. 16,000 28,400 42,000

Overhead............................... 8,000 14,200 21,000

Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $3,600; and overhead, $1,800. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions. (Assume this company's predetermined overhead rate did not change across these months).

Required - What predetermined overhead rate is used during June?