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RSB [31]
3 years ago
15

Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Compa

ny's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:
a. 5.0%.
b. 12.0%.
c. 20.0%.
d. 500.0%.
e. 16.7%.
Business
1 answer:
RUDIKE [14]3 years ago
5 0

Answer:

20%

Explanation:

Data provided:

Direct labor cost = $30,000

Direct materials cost = $50,000

Factory overhead applied = $6,000

Now,

The overhead application rate is given as:

Overhead application rate = \frac{\textup{Factory overhead applied}}{\textup{Direct labor cost}}\times100

therefore,

Overhead application rate = \frac{\textup{6,000}}{\textup{30,000}}\times100

or

Overhead application rate = 0.2 × 100% = 20%

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4 years ago
Outstanding stock of the Whispering Winds Corp. included 39000 shares of $5 par common stock and 13000 shares of 5%, $10 par non
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