Question

Lowden Company has a predetermined overhead rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $50,000 and direct materials cost is $80,000. How much overhead cost should Lowden Company should apply in the current period?

Answer 1

Based on the direct materials cost and the predetermined overhead rate, Lowden company should apply an oevrhead cost of $128,000.

How much overhead should be applied?

This can be found as:

= Direct materials x Predetermined overhead rate

Solving gives:

= 80,000 x 160%

= $128,000

In conclusion, the overhead cost to be applied is $128,000.

Find out more on predetermined overhead rates at brainly.com/question/26372929.

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