Question

g A company has an overhead application rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $50,000 and direct materials used cost $80,000. Determine the amount of overhead Lowden Company should record in the current period. Group of answer choices

Answer 1

Answer:

Allocated MOH= $128,000

Explanation:

Giving the following information:

Predetermined overhead rate= 160% of direct material cost.

Actual direct material= $80,000

To allocate overhead, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.6*80,000

Allocated MOH= $128,000