# Accounting 3

Wheeler’s 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 \$350,000
Factory machinery depreciation \$55,000
Factory supervisor salaries \$140,000
Factory direct labor \$300,000
Factory supplies \$7,500
Factory property tax \$37,500
Total expected costs \$1,000,500

Required:
1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is \$15 per hour.

2. Determine the amount of applied overhead if 18,500 actual hours are worked in the upcoming year.

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