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Homework answers / question archive / A company has an overhead application rate of 160% and allocates overhead based on direst material cost
A company has an overhead application rate of 160% and allocates overhead based on direst material cost. During the current period, direct labor cost is $50,000 and direct materials used cost $80,000. Determine the amount of overhead Lowden Company should record in the current period.
Lowden should record overhead $128000in the current period.
Explanation
Given,
Direct Material Cost = $80000
Overhead Application rate = 160% of Direct Material
So,
Overhead = 80000* 160%
= 128000
