Question: The Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming

The 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 ............ $ 650,750

Shop direct labor ........... 520,625

Shop and repair equipment depreciation . 12,800

Shop supervisor salaries ........ 93,125

Shop property tax .......... 22,300

Shop supplies ............. 12,650

Advertising expense ......... 18,100

Administrative office salaries ....... 61,600

Administrative office depreciation expense . 8,050

Total costs and expenses ...... $1,400,000

The average shop direct labor rate is $17 per hour.

Determine the predetermined shop overhead rate per direct labor hour.

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