What will be the predetermined overhead rate per hour

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Problem - Kelsh Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

Direct materials $10,000

Direct labour $30,000

Sales commissions $40,000

Salary of production supervisor $20,000

Indirect materials $4,000

Advertising expense $8,000

Rent on factory equipment $10,000

Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. What will be the predetermined overhead rate per hour?

Reference no: EM132869283

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