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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 $ 342,800
Factory machinery depreciation 57,500
Factory supervisor salaries 140,500
Factory direct labor 202,901
Factory supplies 44,900
Factory property tax 29,250
Advertising cost 22,500
Administrative salaries 46,500
Administrative-related depreciation 20,700
Total expected costs $ 907,551

Required:

  1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.21 per hour.
  2. Determine the amount of applied overhead if 17,600 actual hours are worked in the upcoming year.

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