Dubois Decors is an interior decorator in St. Louis, Missouri. The following costs were incurred in the firms contract to redecorate a corporate CEOs office.

Direct material used	$	35,000
Direct professional labor	$	60,000

The firms budget for the year included the following estimates:

Budgeted overhead	$	400,000
Budgeted direct professional labor	$	250,000

Overhead is applied to contracts using a predetermined overhead rate calculated annually. The rate is based on direct professional labor cost. What is the predetermined overhead rate?

a. 62.5%

b. 58.3%

c. 150%

d. 170%

e. None of these choices are correct. The correct number is: ________________