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5 June, 21:52

Lowden Company has a predetermined overhead rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $53,000 and direct materials cost is $83,000. How much overhead cost should Lowden Company should apply in the current period?

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  1. 5 June, 21:56
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    The overhead cost which should be applied in the current period amounts to $132,800.

    Explanation:

    The overhead cost which the company should apply in the current period is computed as:

    Overhead cost = Direct Material Cost * Pre - determined overhead rate

    = $83,000 * 160%

    = $132,800

    Therefore, the cost of overhead amount to $132,800 which the Lowden Company should apply in the present period.
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