Question

Lowden Company has an overhead application rate of 162% and allocates overhead based on direct material cost. During the current period, direct labor cost is $63,000 and direct materials used cost $77,000. Determine the amount of overhead Lowden Company should record in the current period. Multiple Choice
$38,889.
$124,740.
$77,000.
$47,531.
$63,000.

Answer 1

Answer:

The amount of overhead Lowden Company should record in the current period is $124,740

Explanation:

Overhead application = 162%

Material cots = $77,000

Labor cost = $63,000

As allocated overhead based on direct material cost

Current period Overhead = $77,000 x 162%

Current period Overhead = $77,000 x 1.62

Current period Overhead = $124,740

So, the amount of overhead Lowden Company should record in the current period is $124,740