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Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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
Transcribed Image Text:Fatima 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
Shop direct labor
$822,000
600,000
Shop and repair equipment depreciation $42,200
Shop supervisor salaries
Shop property taxes
Shop supplies
Advertising expense
$85,400
$17,200
$13,400
16,400
70,700
Administrative office salaries
Administrative office depreciation expense 9,000
The average shop direct labor rate is $31.50 per hour.
Determine the predetermined shop overhead rate per direct labor hour.
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