Pierpont 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:

The average shop direct labor rate is $20 per hour. Determine the predetermined shop overhead rate per direct labor hour.

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$ 700,000 Engine parts Shop direct labor Shop and repair equipment depreciation 520,000 38,000 Shop supervisor salaries Shop property tax Shop supplies 100,000 18,000 13,000 Advertising expense 14,240 Administrative office salaries 60,000 8,000 Administrative office depreciation expense Total costs and expenses $1,471,240