In this paper, the performance of a multicarrier CDMA system applying M-ary orthogonal signaling and adaptive subchannel allocation scheme is analyzed for forward links in Rayleigh fading channel. Also, the effect of error caused by subchannel allocation is analyzed. In the proposed system, each DS waveform is transmitted over the subchannel having the biggest fading among L subchannels. Considering M-ary orthogonal signaling and 4 subchannels, the BER of $10^{-3}$ is satisfied if SNRs are 7.33 dB, 5.33 dB, and 4.47 dB for k = 1, 2, and 3, respectively. Therefore, SNR is decreased as k is increased. If the error of subchannels exists, the BER of $10^{-3}$ is met if SNR is 8.18 dB in the absence of M-ary orthogonal signaling. So, a required SNR is declined about 0.85 dB. Adding the M-ary orthogonal signaling with k = 4, it is observed that the multicarrier CDMA system has performance improvement because a required SNR is 5.44 dB.