Turbo Mechanics Ltd. uses a job order cost system to determine the cost of performing vehicle repair services. Estimated costs and expenses for the upcoming year are as follows: Cost Component Repair parts Direct labor Amount ($) $1,250,000 $840,000 Shop equipment depreciation $52,800 Shop manager salaries Shop insurance Shop utilities Marketing expenses Administrative salaries $112,400 $28,600 $19,200 $31,500 $96,300 Office equipment depreciation $14,200 Total costs and expenses $2,445,000 The average direct labor rate is $28 per hour. Determine the predetermined shop overhead rate per direct labor hour.

Turbo Mechanics Ltd. uses a job order cost system to determine the cost of performing vehicle repair services. Estimated costs and expenses for the upcoming year are as follows: Cost Component Repair parts Direct labor Amount ($) $1,250,000 $840,000 Shop equipment depreciation $52,800 Shop manager salaries Shop insurance Shop utilities Marketing expenses Administrative salaries $112,400 $28,600 $19,200 $31,500 $96,300 Office equipment depreciation $14,200 Total costs and expenses $2,445,000 The average direct labor rate is $28 per hour. Determine the predetermined shop overhead rate per direct labor hour.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 10E: Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair...

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