OK Company Uses a Job Order Cost Accounting System and Allocates

question 134

Multiple Choice

O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. 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 O.K. Company's overhead application rate?

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

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Efficient Outcome

A situation in which resources are allocated in the most optimal way, often leading to the maximum possible benefit.

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