Loraine Company Applies Manufacturing Overhead to Jobs Using a Predetermined

Multiple Choice

Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The balance on August 1 in the Raw Materials Stock account was:

A) £4,500.
B) £7,000.
C) £9,000.
D) £11,500.