Wheeler's 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 Factory machinery depreciation Factory supervisor salaries Factory direct labor Factory supplies Factory property tax Advertising cost Administrative salaries Administrative-related depreciation Total expected costs $ 339,800 56,500 143,500 210,780 39,900 34,250 25,500 49,500 19,700 $919,430 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.71 per hour. 2. Determine the amount of applied overhead if 17,900 actual hours are worked in the upcoming year.
Wheeler's 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 Factory machinery depreciation Factory supervisor salaries Factory direct labor Factory supplies Factory property tax Advertising cost Administrative salaries Administrative-related depreciation Total expected costs $ 339,800 56,500 143,500 210,780 39,900 34,250 25,500 49,500 19,700 $919,430 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.71 per hour. 2. Determine the amount of applied overhead if 17,900 actual hours are worked in the upcoming year.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 1CE: Ventana Window and Wall Treatments Company provides draperies, shades, and various window...
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