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Instructions

Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:

Direct materials

$

6,000

Direct labor

$

20,000

Rent on factory building

$

15,000

Sales salaries

$

25,000

Depreciation on factory equipment

$

8,000

Indirect labor

$

12,000

Production supervisor's salary

$

15,000

Jameson estimates that 20,000 direct labor-hours will be worked during the year. Calculate the predetermined overhead rate per hour .