Jimbob Co Has the Following Estimated Costs for the Next Year

Multiple Choice

Jimbob Co. has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ The company estimates that 20,000 labour hours will be worked and 1,000 machine hours incurred during the year. If overhead is applied on the basis of direct labour costs, the overhead rate will be:

A) 100%.
B) 400%.
C) 225%.
D) 200%.