Question – A manufacturing company uses a job order costing account system. Overhead is applied using
pounds of direct materials used as an allocation base. Total costs for a particular job were $5720. Of
this amount $2600 was direct labor and $1040 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?
$2 per pound of direct material used
$1040 per pound of direct material used
$520 per pound of direct material used
$4 per pound of direct material used
$2080 per pound of direct material used
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