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