A Manufacturing Company Uses a Job Order Cost Accounting System

Multiple Choice

A manufacturing company uses a job order cost accounting system.Overhead is applied using direct labor hours as an allocation base.Total costs for a particular job were $5,720.Of this amount $2,600 was direct labor and $1,040 was direct material.The company pays $26 per hour of direct labor and $2 per pound of direct materials.What is this company's overhead rate?

A) $26.00 per direct labor hour.
B) $20.80 per direct labor hour.
C) $ 4.00 per direct labor hour.
D) $80.00 per direct labor hour.
E) $2,080 per direct labor hour.