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Question(s) / Instruction(s):

A manufacturing company uses a job order cost accounting system. Overhead is applied using pounds of direct materials used as an allocation base. Total costs for a particular job were $5,720. Of this amount $2,600 was direct labor and $1,040 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?

  • $2,080 per pound of direct material used.
  • $4 per pound of direct material used.
  • $1,040 per pound of direct material used.
  • $520 per pound of direct material used.
  • $2 per pound of direct material used.

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