If Direct Material Cost is applied as a Company Rate, at what rate should overhead be applied to bids? (Use the following table to answer this question)

Question 18 options:

A)

33%

B)

11%

C)

44%

D)

55%

20x4 BUDGET BY PROFIT CENTER COMPANY NEW WORK REPAIRS OVER THE COUNTER SALES $1,000,000 $500,000 $400,000 $100,000 EARNINGS COST OF CONSTRUCTION LABOR 250,000 100,000 150,000 0 50,000 MATERIALS 450,000 250,000 150,0000 50,000 0 0 50,000 SUBCONTRACT 50,000 750,000 TOTAL DIRECT COST 400,000 300,000 50,000 250,000 100,000 100,000 GROSS MARGIN VARIABLE OPER. EXPENSE 5,000 15,000 0 20,000 AUTO AND TRUCK 5.000 01 25,000 30,000 INDIRECT LABOR TOTAL VARIABLE OPER. EXP 50,000 10,000 15,000 25,000 FIXED OPER. EXPENSE 3,000 9,000 0 12,000 DEPRECIATION RENT 99,600 16,000 30,000 600 OTHER 38,400 20,000 000 3,400 54,000 57,000 150,000 39,000 TOTAL FIXED OPER. EXPENSE 49,000 69,000 82,000 TOTAL OPER EXPENSE 200,000 51,000 $31,000 $50,000 $32,000 NET PROFIT