National Inc

Multiple Choice

National Inc.manufactures two models of CMD that can be used as cell phones,MPX,and digital camcorders.
National uses a volume-based costing system to apply factory overhead based on direct labor dollars.The unit prime costs of each product were as follows:
National's controller had been researching activity-based costing and decided to switch to it.A special study determined National's two products have the following budgeted activities:
What is the overhead application rate using the firm's volume-based costing system (rounded to the nearest percent or cents) ?

A) 350 percent of direct labor cost.
B) $51.89 per direct labor-hour.
C) 68 per cent of direct labor cost.
D) 5,189 percent of direct labor cost.
E) 5,110 percent of direct labor cost.