Wheeler\'s Bike Company manufactures custom racing bicycles. The company uses a

Question

Wheeler's Bike Company manufactures custom racing bicycles. The company uses a job order cost system to deterrnine the cast of each bike. Estimated costs and expenses for the coming year follow B ke parts Factory machinery deprecistion Factory superviscr salaries Faclory drect labor actory supplies Factory prcperty tax Adverlising cwsl Administrative salaries Ad ministrative-related depreciation Intal experied costs $351,800 5$,500 141,500 234,423 13,400 18,500 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.81 per hour. (Round your answer to 2 decimal places.) por DL Hour 2. Determine the amount of applied overhead if 18,600 actual hours are worked in the upcoming year. (Round your intermediate calculations to 2 decimals. Round your final answer to the nearest whole dollar.)

Explanation / Answer

Answer 1. Estimated Direct Labor Hours = $234,423 (Factory Direct Labor Hours) / $12.81 (Average Direct Labor Rate) Estimated Direct Labor Hours = 18,300 hours Factory Machinery Depreciation      56,500.00 Factory Supervisor Salaries    141,500.00 Factory Supplies      43,400.00 Factory Property Tax      31,750.00 Total Estimated Manuacturing Overhead    273,150.00 Predetermined Overhead Rate = $273,150 (Estimated Manufacturing Overhead) / 18,300 hrs (DLH) Predetermined Overhead Rate = $14.93 per DLH (Approx.) Answer 2. Applied Overhead = 18,600 hrs (DLH) X $14.93 (Predetermined Overhead Rate) Applied Overhead = $277,627.87 or say $277,628 (Approx.)

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