{"id":59019,"date":"2024-04-16T01:29:45","date_gmt":"2024-04-16T01:29:45","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=59019"},"modified":"2024-04-16T01:29:45","modified_gmt":"2024-04-16T01:29:45","slug":"factory-overhead-is-rs-300000-and-direct-material-cost-is-rs-500000-what-is-the-overhead-rate-under-direct-material-cost-method","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/factory-overhead-is-rs-300000-and-direct-material-cost-is-rs-500000-what-is-the-overhead-rate-under-direct-material-cost-method\/","title":{"rendered":"Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;25%&#8221; option2=&#8221;30%&#8221; option3=&#8221;60%&#8221; option4=&#8221;75%&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. 25%.<\/p>\n<p>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%.<\/p>\n<p>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.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;25%&#8221; option2=&#8221;30%&#8221; option3=&#8221;60%&#8221; option4=&#8221;75%&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-59019","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/factory-overhead-is-rs-300000-and-direct-material-cost-is-rs-500000-what-is-the-overhead-rate-under-direct-material-cost-method\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;25%&#8221; 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