Kayak Company Uses a Job Order Costing System and Allocates

Multiple Choice

Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.Kayak Company's production costs for the year were: direct labor,$30,000;direct materials,$50,000;and factory overhead applied $6,000.The overhead application rate was:

A) 5.0%.
B) 12.0%.
C) 20.0%.
D) 500.0%.
E) 16.7%.