[The following information applies to the questions displayed below.]
Capri Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost.Cost flows through the Work in Process Inventory account during March are given below:
Only Job #007 was still in process at the end of March and this job had been charged with $40,000 in direct materials cost.
-The amount of overhead costs applied to Job #007 during March was:
A)$90,000.
B)$26,250.
C)$65,000.
D)$60,000.

Question

[The following information applies to the questions displayed below.]
Capri Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost.Cost flows through the Work in Process Inventory account during March are given below:
  Only Job #007 was still in process at the end of March and this job had been charged with $40,000 in direct materials cost.
-The amount of overhead costs applied to Job #007 during March was:
A)$90,000. 
B)$26,250. 
C)$65,000. 
D)$60,000.

Quizplus · Accepted Answer

The overhead costs applied to a job are typically calculated based on a predetermined overhead rate and the actual activity level (such as machine hours or labor hours) for the job. Without additional information on the rate or activity level, the correct answer is based on the given options.

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