Your Company employs a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate is based on direct materials cost. The companys management made the following estimates for the year:

Machine-hours 218,750

Direct labor-hours 80,000

Direct labor cost $400,000

Direct materials cost $600,000

Manufacturing overhead cost $900,000

What is the predetermined overhead rate that should be used during the year?

		150%
		150% of direct materials cost
		66.7%
		66.7% of direct materials cost