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2 September, 19:27

Lowden Company has an overhead application rate of 156% and allocates overhead based on direct material cost. During the current period, direct labor cost is $71,000 and direct materials used cost $70,000. Determine the amount of overhead Lowden Company should record in the current period.

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  1. 2 September, 19:57
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    overhead Lowden Company should record in the current period is $109200

    Explanation:

    given data

    overhead rate = 156%

    direct labor cost = $71,000

    direct materials cost = $70,000

    to find out

    amount of overhead Lowden Company should record in the current period

    solution

    we find here first basis of allocation of overhead that is equal to direct material cost

    and direct material cost is $70000

    so

    overhead in the current period will be

    overhead in the current period = 70000 x 156%

    overhead in the current period = 109200

    so overhead Lowden Company should record in the current period is $109200
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