Smith Fabricating Uses Job Costing and Applies Overhead Using a }&\text

$\begin{array}{lccc}&\text { Direct }&\text {Direct}&\text { Direct }\\&\text { Materials }&\text {Labour Cost }&\text {Labour Hours }\\\text { Job 200 } & \$ 500 & \$ 800 & 40 \\\text { Job 201 } & 350 & 200 & 10 \\\text { Job 202 } & 1,000 & 600 & 30\end{array}$ Smith Fabricating uses job costing and applies overhead using a normal costing system and uses direct labour cost as the allocation base. This period's estimated overhead cost is $100,000 and estimated direct labour cost of $50,000 and 2,500 direct labour hours.
What is the overhead allocation rate?

A) 200%
B) 50%
C) 30%
D) 60%

Correct Answer:

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