Canoe Company Uses a Job Order Cost Accounting System and Allocates

question 160

Multiple Choice

Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied $6,000. The overhead application rate was:

• A) 5.0%.
• B) 12.0%.
• C) 20.0%.
• D) 500.0%.
• E) 16.7%.

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