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Apple Tree Enterprises allocated overhead based on direct material cost and has a predetermined overhead rate of 161%. During
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Answer #1

Given Direct Material and Direct labor of 78,000 & 62,000 respectively.

Overheads are to be calculated based on the direct material.

Given predetermined overhead rate is 161% of direct material.

Direct material = 78,000

Overheads = 78,000*161% = 125,580.

So, option 3 is correct.

Option 1,2,4 and 5 are incorrect.

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