Question

Lowden Company has an overhead application rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $61,000 and direct materials used cost $79,000. Determine the amount of overhead Lowden Company should record in the current period.
a) $49,375.
b) $38,125.
c) $79,000.
d) $126,400.
e) $61,000

Answer 1

Answer:

=$126,400.00

Explanation:

Overhead application rate: 160 per cent on direct material cost

Direct labor cost : $ 61,000

Direct materiel cost: $  79,000

Overhead cost = 160 per cent of $ 79,000.00

   = $79,000x1.6

   =$126,400.00