Street Runner 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                                                        $ 740,000Shop direct labor                                                    500,000Shop and repair equipment depreciation              40,000Shop supervisor salaries                                         133,000Shop property taxes                                               22,000Shop supplies                                                         10,000Advertising expense                                                 20,000Administrative office salaries                                   71,400Administrative office depreciation expense             6,000Total costs and expenses                                       $1,542,400The average shop direct labor rate is $20 per hour.Determine the predetermined shop overhead rate per direct labor hour.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Street Runner 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                                                        $ 740,000
Shop direct labor                                                    500,000
Shop and repair equipment depreciation              40,000
Shop supervisor salaries                                         133,000
Shop property taxes                                               22,000
Shop supplies                                                         10,000
Advertising expense                                                 20,000
Administrative office salaries                                   71,400
Administrative office depreciation expense             6,000
Total costs and expenses                                       $1,542,400
The average shop direct labor rate is $20 per hour.
Determine the predetermined shop overhead rate per direct labor hour.

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