DVD Company uses a job order cost accounting system and during the last period incurred $60,000 of overhead and $80,000 of direct labor. DVD estimates that its overhead next period will be $70,000. It also expects to incur $90,000 of direct labor. If DVD applies overhead based on direct labor cost, their overhead application rate for the next period should be (Round your answer to 2 decimal places.): 85.71%. 77.78%. 92.78%. 28.57%. 133.33%.

DVD Company uses a job order cost accounting system and during the last period incurred $60,000 of overhead and $80,000 of direct labor. DVD estimates that its overhead next period will be $70,000. It also expects to incur $90,000 of direct labor. If DVD applies overhead based on direct labor cost, their overhead application rate for the next period should be (Round your answer to 2 decimal places.):

•     85.71%.
•     77.78%.
•     92.78%.
•     28.57%.
•     133.33%. 

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