Problem:
The work in process inventory for the Smith Corporation has a balance of $4800 at the end of an accounting period. The job-cost sheets of two incomplete jobs show charges of $800 and $400 for materials used and charges of $600 and $1000 for direct labor used. From this information, it appears that Smith Corporation is using a predetermined rate, as a percentage of direct labor costs of:
A. 240%
B. 125%
C. 80%
D. 41.7%