The Work in Process Inventory Account of a Manufacturing Company

Multiple Choice

The Work in Process Inventory account of a manufacturing company has a $4,400 debit balance.The company applies overhead using direct labor cost.The cost sheet of the only job still in process shows direct material cost of $2,000 and direct labor cost of $800.Therefore,the company's predetermined overhead rate is:

A) 40% of direct labor cost.
B) 50% of direct labor cost.
C) 80% of direct labor cost.
D) 200% of direct labor cost.
E) 300% of direct labor cost.