CWN Company Uses a Job Order Costing System and Last

Multiple Choice

CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:

A) 107%.
B) 80%.
C) 133%.
D) 75%.
E) 125%.