Calculating Predetermined Overhead Rate and Applied Overhead Spokesman Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike....

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:

Required:

1. Determine the predetermined overhead rate per direct labor hour if the average direct labor rate is $12 per hour.

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