I don’t know why I’m getting the wrong answer to this question. Let’s see if anyone here can get the correct answer… I’m assuming the software is incorrect ( that is validating the answer )
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:
The average shop direct labor rate is $17 per hour.
Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.
Nothing but to someone that gets it correct.
According to the software, the correct answer is NOT 8286.76
Hint #1 of 4: Factory overhead includes all manufacturing cost except direct materials and direct labor.
Hint #2 of 4: Cost allocation is the process of assigning factory overhead cost to a cost object, such as a job.
Hint #3 of 4: Predetermined factory overhead rate is equal to estimated total factory overhead cost divided by estimated activity base.
Hint #4 of 4: Direct materials (auto parts), direct labor (shop labor), advertising and administrative expenses (period costs) are not part of total shop overhead.
