Predetermined Overhead Rate and Applied Overhead

Speedy Shoe Factory manufactures running shoes. Overhead is applied to the shoes on the basis of direct labor hours. Last year, total overhead costs were expected to be $72,000. Actual overhead costs totaled $80,000 for 8,000 actual hours. At the end of the year, overhead was underapplied by $5,000.

Round your answers to three decimal places and use the same for further calculations.

A. Calculate the predetermined overhead rate.

$_____ per hour

B. How much overhead should be applied to a job that was completed in three direct labor hours?

$_____