Using the following accounts and an overhead rate of 130% of direct labor cost, compute the amount of applied overhead.
A) $78,000.
B) $60,000.
C) $138,000.
D) $71,890.
E) $90,500.

Question

Quizplus · Accepted Answer

The applied overhead is calculated by multiplying the direct labor cost by the overhead rate. If the overhead rate is 130% (or 1.30 as a decimal), and assuming the direct labor cost is given or can be inferred as $60,000 (since none is explicitly provided, but this choice makes the calculation work), the applied overhead would be $60,000 * 1.30 = $78,000.

Using the Following Accounts and an Overhead Rate of 130