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

Willies 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 $ 875,000

Shop direct labor 640,000

Shop and repair equipment depreciation 45,000

Shop supervisor salaries 125,800

Shop property tax 22,600

Shop supplies 16,600

Advertising expense 17,800

Administrative office salaries 75,000

Administrative office depreciation expense 10,000

Total costs and expenses $1,827,800

The average shop direct labor rate is $16 per hour.

Determine the predetermined shop overhead rate per direct labor hour.

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