Answer:
Overhead rate = $6.3
Step-by-step explanation:
Given : Labor rate = $8.00 per hour
Labor time = 6 hours
Retail price of parts = $0
Total job cost = $86.00
To find : Overhead rate
Solution:
Overhead cost = Total Cost - The cost of all inputs
The Overhead Rate is this number divided by total labor hours.
Total job cost = $86.00
Labor Cost = labor rate × labor time = 8 × 6 = $48
Retail price of parts:$0
Overhead Costs = total cost - labor cost= $86 - $48 = $38
Now, we divided overhead cost by labor hours to get overhead rate,
Overhead Rate [tex]=\frac{38}{6}=6.33[/tex]
Therefore, Overhead rate is $6.3
