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Peace Company uses a job order cost system. Actual manufacturing overhead was $88,000 and actual direct labor cost was $110,000 for the period. The company

  1. Peace Company uses a job order cost system. Actual manufacturing overhead was $88,000 and actual direct labor cost was $110,000 for the period. The company estimated that its annual manufacturing overhead cost would be $75,000 and the company estimated it would incur $100,000 of direct labor cost for the year. If Peace Company applies manufacturing overhead based on direct labor cost, the company's overhead application (allocation) rate should be:

    A. 107%.

    B. 80%.

    C. 88%.

    D. 75%.

    68.182% (rounded).

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