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 determine the cost of each bike. Estimated costs and expenses for the coming year follow: Biko 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 $344,800 53,500 144,000 240,851 38,400 28,250 24,500 54,000 18,700 $947,001 Required: 1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $12.61 per hour. (Round your answer to 2 decimal places.) Predetermined Overhead Rate per DL Hour 2. Determine the amount of applied overhead if 19,400 actual hours are worked in the upcoming year. (Round your intermediate calculations to 2 decimals. Round your final answer to the nearest whole dollar.) Applied Overhead

Explanation / Answer

Calculate predetermine overhead rate :

13.83 per DLH

2. Applied overhead = Predetermine overhead rate*actual hours

= 13.83*19400

Applied overhead = 268302

Factory machine dep 53500 Factory supervisor's salary 144000 Factory supplies 38400 Factory property tax 28250 Total overhead 264150 Total direct labour hour (240851/12.61) 19100 Predetermine overhead rate

13.83 per DLH

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