ABC Corporation allocates overhead based on direct labor cost.Assume ABC expects to incur a total of $1,025,000 in overhead costs and $820,000 in direct labor costs.Actual overhead costs incurred totaled $1,050,000 and actual direct labor costs totaled $800,100.ABC's predetermined overhead rate is nearest
A) 125% of direct labor cost.
B) 128% of direct labor cost.
C) 98% of direct labor costs.
D) 100% of direct labor costs.

Question

Quizplus · Accepted Answer

The Answer of ABC Corporation allocates overhead based on direct labor cost.Assume ABC expects to incur a total of $1,025,000 in overhead costs and $820,000 in direct labor costs.Actual overhead costs incurred totaled $1,050,000 and actual direct labor costs totaled $800,100.ABC's predetermined overhead rate is nearest
A) 125% of direct labor cost.
B) 128% of direct labor cost.
C) 98% of direct labor costs.
D) 100% of direct labor costs.

ABC Corporation Allocates Overhead Based on Direct Labor Cost