Alton Company has an overhead application rate of 160% and allocates overhead based on direct materials. During the current period, direct labor is $50,000 and direct materials used are $80,000. Determine the amount of overhead Alton Company should record in the current period.
A) $31,250.
B) $50,000.
C) $80,000.
D) $128,000.
E) $208,000.

Question

Quizplus · Accepted Answer

Overhead applied = (Overhead application rate x Direct materials used)
Overhead applied = (160% x $80,000)
Overhead applied = $128,000.

Alton Company Has an Overhead Application Rate of 160% and Allocates