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Simplex Company Has the Following Estimated Costs for Next Year

question 84

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Simplex Company has the following estimated costs for next year:
 Direct materials $15,000 Direct labour $55,000 Sales commissions $75,000 Salary of production supervisor $35,000 Indirect materials $5,000 Advertising expense $11,000 Rent on factory equipment $16,000\begin{array} { l r } \text { Direct materials } & \$ 15,000 \\\text { Direct labour } & \$ 55,000 \\\text { Sales commissions } & \$ 75,000 \\\text { Salary of production supervisor } & \$ 35,000 \\\text { Indirect materials } & \$ 5,000 \\\text { Advertising expense } & \$ 11,000 \\\text { Rent on factory equipment } & \$ 16,000\end{array}
Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year.If overhead is applied on the basis of machine hours,what will be the overhead rate per hour?

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