Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair
Question:
Exotic 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............................................................................................$ 380,000
Shop direct labor.....................................................................................1,872,000
Shop and repair equipment depreciation............................................62,500
Shop supervisor salaries.........................................................................240,000
Shop property taxes................................................................................36,940
Shop supplies...........................................................................................10,000
Advertising expense................................................................................28,000
Administrative office salaries.................................................................150,000
Administrative office depreciation expense..........................................8,000
Total costs and expenses.....................................................................$2,787,440
The average shop direct labor rate is $37.50 per hour.
Determine the predetermined shop overhead rate per direct labor hour.
Step by Step Answer:
Forensic And Investigative Accounting
ISBN: 9780808056300
10th Edition
Authors: G. Stevenson Smith D. Larry Crumbley, Edmund D. Fenton