Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?
A. 25%
B. 30%
C. 60%
D. 75%
Answer: Option C
Solution(By Examveda Team)
Overhead rate = Factory overhead / Direct material cost * 100= 300000 / 500000 * 100 = 60%.
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300000/50000*100=60%