Spokesman Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming year follow

Spokesman Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming year follow:

Bike parts	$	341,800
Factory machinery depreciation		54,000
Factory supervisor salaries		142,500
Factory direct labor		207,757
Factory supplies		44,400
Factory property tax		30,750
Advertising cost		23,000
Administrative salaries		51,500
Administrative-related depreciation		19,200
Total expected costs	$	914,907

Requirement 1:

Determine the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.11 per hour. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Predetermined overhead rate

$ 14.53

per DL Hour

Requirement 2:

Determine the amount of applied overhead if 19,000 hours are worked in the upcoming year. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Applied overhead

$ 276,070

Explanation:

1:

Must first determine expected number of DL hours.

Estimated DL Cost / DL rate = Estimated DL hours

$207,757 / $11.11 = 18,700 DL hours expected

Predetermined Overhead Rate = Estimated Mfg. Overhead / Estimated DL hours

Estimated Total Manufacturing Overhead:

Factory machinery depreciation	$	54,000
Factory supervisor salaries		142,500
Factory supplies		44,400
Factory property tax		30,750
Total Estimated MOH	$	271,650

Predetermined Overhead Rate = $271,650 / 18,700 DL Hours

= $14.53 per DL Hour

2:

Applied Overhead  = Overhead Rate × Actual DL Hours

= $14.53 × 19,000 DL Hours

= $276,070