ACCOUNTING
Warren, Reeve and Duchac
Financial Accounting
Managerial Accounting
Carl Warren, James M. Reeve, Jonathan E. Duchac
Chapter 19
EX 19-10 Willies Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:
Engine parts $ 875,000
Shop direct labor 640,000
Shop and repair equipment depreciation 45,000
Shop supervisor salaries 125,800
Shop property tax 22,600
Shop supplies 16,600
Advertising expense 17,800
Administrative office salaries 75,000
Administrative office depreciation expense 10,000
Total costs and expenses $1,827,800
The average shop direct labor rate is $16 per hour.
Determine the predetermined shop overhead rate per direct labor hour.
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