A company’s cost accounting system uses direct labor costs to apply overhead to goods in process and finished goods invento¬ ries. Its production costs for the period are: direct materials, $45,000; direct labor, $35,000; and overhead applied, $38,500. What is its predetermined overhead allocation rate?

a. 10%

b. 110%

c. 86%

d. 91%

e. 117%