Question - Baker Co. has two departments (Processing and Packaging) and uses a job order costing system. Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July:
Processing Packaging
Machine hours 2500 1000
Direct labor cost $44500 $23000
Applied overhead $55000 $51750
Refer to Baker Co. What is the overhead application rate for Packaging?
A) $23.00
B) $51.75
C) $2.25
D) $0.44