Edwards Auto Body Uses a Job Order Cost System

question 35

Multiple Choice

Edwards Auto Body uses a job order cost system.Overhead is applied to jobs on the basis of direct labor hours.During the current period,Job No.337 was charged $425 in direct materials,$475 in direct labor,and $190 in overhead.If direct labor costs an average of $16 per hour,the company's overhead application rate is:

• A)$7.27 per direct labor hour.
• B)$6.40 per direct labor hour.
• C)$17.50 per direct labor hour.
• D)$40 per direct labor hour.