Question - The 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 $650,750
Shop direct labor 520,625
shop and repair equipment depreciation 12,800
shop supervisor salaries 93,125
shop property tax 22,300
shop supplies 12,650
advertising expense 18,100
administrative office salaries 61,600
administrative office depreciation expense 8,050
Total cost and expenses $1,400,000
The average shop direct labor rate is $17 per hour.
Determine the predetermined shop overhead rate per direct labor hour.