Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair

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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.

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Forensic And Investigative Accounting

ISBN: 9780808056300

10th Edition

Authors: G. Stevenson Smith D. Larry Crumbley, Edmund D. Fenton

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