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Wheelers Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and
Wheelers Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming year follow:
Bike parts | $ | 345,800 | |
Factory machinery depreciation | 53,000 | ||
Factory supervisor salaries | 141,500 | ||
Factory direct labor | 223,197 | ||
Factory supplies | 44,900 | ||
Factory property tax | 28,250 | ||
Advertising cost | 24,500 | ||
Administrative salaries | 46,500 | ||
Administrative-related depreciation | 27,700 | ||
Total expected costs | $ | 935,347 | |
1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.61 per hour.
2. Determine the amount of applied overhead if 17,900 actual hours are worked in the upcoming year.
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