Dixie Company, which applies overhead at the rate of 190% of direct material cost, began work on job no. 101 during June. The job was completed in July and sold during August, having accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the basis of this information, the total overhead applied to job no. 101 amounted to:
A) $0.
B) $28,500.
C) $51,300.
D) $70,500.
E) $79,800.

Question

Quizplus · Accepted Answer

Overhead is applied at 190% of direct material cost. Direct material cost is $27,000. Therefore, overhead applied = $27,000 x 190% = $51,300.

Dixie Company, Which Applies Overhead at the Rate of 190