BVD Company Uses a Job Order Cost Accounting System and Last

question 17

Multiple Choice

BVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. BVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be:

• A) 75%.
• B) 80%.
• C) 107%.
• D) 125%.
• E) 133%.

---

Definitions:

Price Strategy

A plan or approach used by businesses to set and adjust prices of their products or services to maximize profitability and meet market demands.

Break-Even Analysis

An assessment to determine the point at which revenue generated equals the costs associated with producing that revenue, indicating no net loss or gain.

Marginal Analysis

A technique in economics and decision-making used to examine the effects of a small change in variables, such as increases or decreases in production output, on the total cost or revenue.

Homestyle Taste

A term used to describe food products or recipes that offer a taste reminiscent of homemade, comforting meals.