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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 labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of: _______a. 300% b. 80% c. 240% d. 125%.

Respuesta :

The company that is using a predetermined overhead rate, as a percentage of direct labor costs is option d. 125%.

Calculation of the percentage:

For computing the predetermined overhead rate first determine the overhead cost of uncompleted jobs which is shown below:

= Balance shown - uncompleted jobs of direct materials - uncompleted jobs of direct labors

= $2,400 - $600 - $800

= $1,000

Now the predetermined overhead rate is

= Cost of uncompleted jobs ÷ uncompleted jobs of direct labors

= $1,000 ÷ $800

= 125%

Hence, the correct option is d. 125%

Learn more about direct labor here: https://brainly.com/question/24600755

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