Cosi Company Uses a Job Order Costing System and Allocates

question 73

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

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Definitions:

Circadian Rhythm

The natural, internal process that regulates the sleep-wake cycle and repeats roughly every 24 hours.

Biological Clock

An internal mechanism that regulates physiological and behavioral functions on a cyclical basis, such as sleep and wakefulness.

Melatonin

A hormone produced by the pineal gland that regulates sleep and wakefulness cycles.

Adrenalin

Also known as epinephrine, a hormone and medication which increases heart rate, muscle strength, blood pressure, and sugar metabolism, often in response to stress.