Cosi Company Uses a Job Order Costing System and Allocates

question 11

Multiple Choice

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Cosi expects to incur $800,000 of overhead during the next period,and expects to use 50,000 labor hours at a cost of $10.00 per hour.What is Cosi Company's overhead application rate?

• A)6.25%.
• B)62.5%.
• C)160%.
• D)1600%.
• E)67%.

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