Road Runner Engine Shop uses a job order cost system to determine the cost of performing engine
Question:
Road 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 ................................................. $ 810,000
Shop direct labor ............................................ 770,000
Shop and repair equipment depreciation ..... 64,000
Shop supervisor salaries ................................ 212,000
Shop property taxes ......................................... 35,000
Shop supplies .................................................... 18,000
Advertising expense ......................................... 44,000
Administrative office salaries .......................... 73,400
Administrative office depreciation expense .. 12,000
Total costs and expenses ......................... $2,038,000
The average shop direct labor rate is $22 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Step by Step Answer:
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider