The hourly rate for a certain work center is to be determined based on the following data:

Question:

The hourly rate for a certain work center is to be determined based on the following data: direct labor rate = $15.00/hr; applicable factory overhead rate on labor = 35%; capital investment in machine = $200,000; service life of the machine = 5 years; rate of return = 15%; in five years = zero; and applicable factory overhead rate on machine = 40%. The work center will be operated two 8-hour shifts, 250 days per year. Determine the appropriate hourly rate for the work center. Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...