Question

MC Qu. 117 Cosi Company uses a job order costing... Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Cosi expects to incur $830,000 of overhead during the next period, and expects to use 53,000 labor hours at a cost of $10.00 per hour. What is Cosi Company's overhead application rate

Answer 1

157%

Step-by-step explanation:

Calculation to determine Cosi Company's overhead application rate

First step is to calculate Total DL Cost

Total DL Cost = 53,000 hours * $10/hr

Total DL Cost= $530,000

Now let determine the overhead application rate

OH rate = $830,000/$530,000*100

OH rate= 157%

Therefore Cosi Company's overhead application rate is 157%