Question
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 $ 351,800 Factory machinery depreciation 54,500 Factory supervisor salaries 139,500 Factory direct labor 238,266 Factory supplies 38,900 Factory property tax 28,750 Advertising cost 22,500 Administrative salaries 47,000 Administrative-related depreciation 18,700 Total expected costs $ 939,916 Required:
1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.81 per hour. (Round your answer to 2 decimal places.)
2. Determine the amount of applied overhead if 18,900 actual hours are worked in the upcoming year. (Round your intermediate calculations to 2 decimals. Round your final answer to the nearest whole dollar.)
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