Fane's Shovels produces small, custom earth-moving equipment for landscaping companies. Manufacturing overhead is allocated to Direct labour hours. The estimated manufacturing overhead is $25000. Further following information is also given

Sales= 75000

Estimated Direct material cost = 3500

Estimated labour hour= 2500

Direct Material = 12500

Direct labour hours= 700

Labour rate per hour = $5

Beginning Work in Process =1500

Ending work in Process= 950

Beginning Finished goods =500

Ending Finished goods= 500

Selling and administrative expense = 25000

What is the predetermined overhead rate?

12.5

10

25

35

35.71

What is the amount of overhead applied ?

17500

7000

3000

4000

3500

What is the Cost of goods sold?

24500

23550

16550

22500

What is the Net income?

26450

25000

23450

22150

29660