XYZ Manufacturing uses a job-order costing system and last period incurred $135,000 of actual overhead and $225,000 of direct labor. XYZ estimates that its overhead next period will be $180,000. It also expects to incur $200,000 of direct labor. If XYZ bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be: a. 60% b. 90% c. 75% d. 80%

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 8PA: Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate...
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XYZ Manufacturing uses a job-order costing system and last period
incurred $135,000 of actual overhead and $225,000 of direct labor.
XYZ estimates that its overhead next period will be $180,000. It also
expects to incur $200,000 of direct labor. If XYZ bases applied
overhead on direct labor cost, its predetermined overhead rate for
the next period should be:
a. 60%
b. 90%
c. 75%
d. 80%
Transcribed Image Text:XYZ Manufacturing uses a job-order costing system and last period incurred $135,000 of actual overhead and $225,000 of direct labor. XYZ estimates that its overhead next period will be $180,000. It also expects to incur $200,000 of direct labor. If XYZ bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be: a. 60% b. 90% c. 75% d. 80%
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