Davis Company has analyzed its overhead costs and derived a general formula for their behavior: $65,000 + $14 per direct labor hour employed. The company expects to use 50,000 direct labor hours during the next accounting period. What overhead rate per direct labor hour should be applied to jobs worked during the period?
Round answer to two decimal places.
| Total Overhead Cost at 50,000 direct labor hours | = | $ 65,000 | + | $ 14.00 | x | 50,000 | = | $ 7,65,000 | ||||
| Overhead rate per direct labor hour | = | Total Overhead costs / Total Direct Labor hour | ||||||||||
| = | $ 7,65,000 | / | 50,000 | |||||||||
| = | $ 15.30 | |||||||||||
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