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AFK Company's job order costing system applies overhead based on direct labor costs. Last period the company incurred $80,000 of actual overhead and $125,000 of
AFK Company's job order costing system applies overhead based on direct labor costs. Last period the company incurred $80,000 of actual overhead and $125,000 of direct labor. AFK estimates overhead costs for next period will be $95,000. It also expects to direct labor costs of $100,000. AFK's predetermined overhead rate for the next period should be:
95% | ||
64% | ||
125% | ||
105% |
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