The Work in Process Inventory Account of a Manufacturing Company

Multiple Choice

The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labour. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labour costs, of:

A) 80%.
B) 125%.
C) 300%.
D) 240%.