Question: Amoruso Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming

Amoruso 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 .................. $ 980,000

Shop direct labor ................ 750,000

Shop and repair equipment depreciation .......53,500

Shop supervisor salaries ............. 140,000

Shop property taxes ..............26,300

Shop supplies ..................20,200

Advertising expense ...............19,900

Administrative office salaries .............84,000

Administrative office depreciation expense ....11,200

Total costs and expenses ...................... $ 2,085,100

The average shop direct labor rate is $ 25 per hour.

Determine the predetermined shop overhead rate per direct labor hour.


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