Predetermined Factory Overhead Rate Exotic 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 $556,200 Shop direct labor 406,000 Shop and repair equipment depreciation 37,900 Shop supervisor salaries 105,300 Shop property taxes 19,100 Shop supplies 14,600 Advertising expense 11,100 Administrative office salaries 47,800 Administrative office depreciation expense 6,100 Total costs and expenses $1,204,100 The average shop direct labor rate is $14.00 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent. $fill in the blank 1 per direct labor hour

$6.10 per direct labor hour

Explanation:

Predetermined shop overhead rate = Estimated Overhead costs / Estimated Direct labor hours

Estimated overhead costs:

= Shop and repair equipment depreciation + Shop supervisor salaries +  Shop property taxes + Shop supplies

= 37,900 + 105,300 + 19,100 + 14,600

= $176,900

Estimated direct labor hours

= Shop direct labor / Average Direct labor rate

= 406,000 / 14

= 29,000 hours

Predetermined shop overhead rate = 176,900 / 29,000

= $6.10 per direct labor hour

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

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