Canoe Company's manufacturing accounting system uses direct - 10474

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  • Posted on: Mon 28 May, 2012
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Request Description

 

Canoe Company's manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods inventories. Canoe Company's manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:

 

Answer

 

 

5.0%.

 

12.0%.

 

20.0%.

 

500.0%.

 

16.7%.

 

Solution Description

 

Canoe Company's manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods inventories. Canoe Company's manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:

 

Answer