25%
30%
60%
75%
Answer is Right!
Answer is Wrong!
The correct answer is A. 25%.
The overhead rate under direct material cost method is calculated by dividing the factory overhead by the direct material cost. In this case, the factory overhead is Rs 3,00,000 and the direct material cost is Rs 5,00,000. Therefore, the overhead rate is 3,00,000 / 5,00,000 = 60%. However, since the direct material cost is only one of the cost components, the overhead rate should be expressed as a percentage of the total cost, which is 60% / 100% = 25%.
Option B is incorrect because it is the overhead rate under direct labor cost method. Option C is incorrect because it is the overhead rate under direct cost method. Option D is incorrect because it is the overhead rate under total cost method.