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Skyline Auto Repair 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 $920,000 • Shop Direct Labor = $700,000 Shop & Repair Equipment Depreciation = $50,000 • • Shop Supervisor Salaries $145,000 • Shop Property Taxes = $30,000 • Shop Supplies = $12,500 • Advertising Expense = $25,000 • Administrative Office Salaries $80,000 • • Administrative Office Depreciation Expense = $10,000 Total Costs and Expenses = $1,972,500 The average shop direct labor rate is $32 per hour. Determine the predetermined shop overhead rate per direct labor hour (rounded to the nearest cent).

Skyline Auto Repair 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 $920,000 • Shop Direct Labor = $700,000 Shop & Repair Equipment Depreciation = $50,000 • • Shop Supervisor Salaries $145,000 • Shop Property Taxes = $30,000 • Shop Supplies = $12,500 • Advertising Expense = $25,000 • Administrative Office Salaries $80,000 • • Administrative Office Depreciation Expense = $10,000 Total Costs and Expenses = $1,972,500 The average shop direct labor rate is $32 per hour. Determine the predetermined shop overhead rate per direct labor hour (rounded to the nearest cent).

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...
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Skyline Auto Repair 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 $920,000 • Shop Direct Labor = $700,000 Shop & Repair Equipment Depreciation = $50,000 • • Shop Supervisor Salaries $145,000 • Shop Property Taxes = $30,000 • Shop Supplies = $12,500 • Advertising Expense = $25,000 • Administrative Office Salaries $80,000 • • Administrative Office Depreciation Expense = $10,000 Total Costs and Expenses = $1,972,500 The average shop direct labor rate is $32 per hour. Determine the predetermined shop overhead rate per direct labor hour (rounded to the nearest cent).
Transcribed Image Text:Skyline Auto Repair 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 $920,000 • Shop Direct Labor = $700,000 Shop & Repair Equipment Depreciation = $50,000 • • Shop Supervisor Salaries $145,000 • Shop Property Taxes = $30,000 • Shop Supplies = $12,500 • Advertising Expense = $25,000 • Administrative Office Salaries $80,000 • • Administrative Office Depreciation Expense = $10,000 Total Costs and Expenses = $1,972,500 The average shop direct labor rate is $32 per hour. Determine the predetermined shop overhead rate per direct labor hour (rounded to the nearest cent).
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