MC Qu. 117 Cosi Company uses a job order costing...

Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Cosi expects to incur $700,000 of overhead during the next period, and expects to use 40,000 labor hours at a cost of $10.00 per hour. What is Cosi Company's overhead application rate?

Multiple Choice

• 5.71%.

• 57.1%.

• 175%.

• 1750%.

• 62%.