Paulson Company had the following estimated costs for 2019: Direct materials ..................... . . . . .
Question:
Paulson Company had the following estimated costs for 2019:
Direct materials ..................... . . . . . . . . . . . . $28,000
Direct labor ......................... . . . . . . . . . . . . . 22,000
Advertising expense ................. . . . . . . . . . 15,000
Rent on factory building ............ . . . . . . . . . 13,500
Depreciation on factory equipment ... . . . . 6,500
Indirect materials ................... . . . . . . . . . . 10,000
Sales commissions ................... . . . . . . . . . 28,000
Production supervisor's salary ...... . . . . . . 40,000
Insurance on equipment .............. . . . . . . . .15,000
It is known that 60% of the insurance relates to equipment in the administrative offices while 40% of the insurance relates to equipment in the factory. Paulson Company estimates that 25,000 machine hours will be used during 2019. Calculate Paulson Company's pre-determined overhead rate based on machine hours. List your answer with two places after the decimal point (i.e., $7.60)
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones