Spokesman Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each hike. Estimated costs and expenses for the coming year follow:

Required:

1. Determine the predetermined overhead rate per direct labor hour if the average direct labor rate is \($12\) per hour.

2. Determine the amount of applied overhead if 18,500 hours are worked in the upcoming year.

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Bike parts $347,800 Factory machinery depreciation 52,500 Factory supervisor salaries 134,000 Factory direct labor 218,400 Factory supplies 36,900 Factory property tax 24,750 Advertising cost 18,000 Administrative salaries Administrative-related depreciation 46,000 17,700 Total expected costs $896,050