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 pounds of direct materials used 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) $2 per pound of direct material used.
B) $1,040 per pound of direct material used.
C) $520 per pound of direct material used.
D) $4 per pound of direct material used.
E) $2,080 per pound of direct material used.