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Problem 1: 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 two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $200 and $250 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?
a. 240%. b. 80%. c. 300%. d. 125%.
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