Santa Fe Company Santa Fe Company has two departments (Processing and Packaging) and uses a job-order costing system. Topeka applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for August:
Refer to Santa Fe Company What is the overhead application rate for Packaging?

Question

Santa Fe Company Santa Fe Company has two departments (Processing and Packaging) and uses a job-order costing system. Topeka applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for August:
 Refer to Santa Fe Company What is the overhead application rate for Packaging?

Quizplus · Accepted Answer

Overhead application rate for Packaging is calculated as follows:

Total overhead cost / Total direct labor cost = $1,500 / $660 = $2.27 (rounded to $2.28)

Therefore, the overhead application rate for Packaging is $2.28 per direct labor cost.

Santa Fe Company Santa Fe Company Has Two Departments (Processing