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.