Jam Corporation uses a predetermined overhead rate based on…
Jam Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 20,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on factory equipment $ 8,000 Indirect labor $ 12,000 Production supervisor’s salary $ 15,000 Jam estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: