Flounder Auto Repairs is a service firm that uses a job costing system. Direct labor consists of mechanics' pay. Direct materials consist of auto parts. Manufacturing overhead costs include items such as the shop manager's salary, utilities, insurance and other sundry indirect costs. As the shop is highly labor-intensive, Flounder Auto Repairs has decided to apply manufacturing overhead on the basis The following estimates for the coming year were made at the start of the year: Budgeted Manufacturing Overhead $106,000 $106,000 Budgeted Direct Labor Hours 2,500 hours Lisa also accessed the following additional information related to the inventory accounts. Ending Balance Applied MOH (Within End. Bal.) Direct Materials Inventory $17,000 Work in Process Inventory 21,280 $8,000 Finished Goods Inventory 41,230 8,000 Cost of Goods Sold 70,490 13,000 While she does not yet have a clear understanding of what amount might be considered significant yet, Lisa knows she must first calculate the difference between actual MOH and applied MOH. 

Calculate the budgeted MOH rate for Lisa's company, assuming that direct labor hours is the cost driver.

Answer rating: 100% (QA)

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