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.

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