A company has an overhead application rate of 125% of direct labor costs.How much overhead would be allocated to a job if it required direct labor costing $20,000?
A)$5,000.
B)$16,000.
C)$25,000.
D)$125,000.
E)$250,000.

Question

Quizplus · Accepted Answer

The overhead application rate is 125% of direct labor costs. Therefore, for direct labor costing $20,000, the overhead allocated would be 125% of $20,000, which is $25,000.

A Company Has an Overhead Application Rate of 125% of Direct