The Work-In-Process Inventory Account of a Manufacturing Firm Shows a Balance

The Work-in-Process Inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $500 and $300 for materials, and charges of $400 and $600 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:

A) 83%.
B) 120%.
C) 40%.
D) 300%.

Correct Answer:

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