Question

Concord Corporation applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $7000. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is 25000?

Answer 1

Answer:

the amount of direct materials charged to Job 130 is $9,250.

Explanation:

Calculation of direct materials charged to Job 130

Work In Process Inventory             $25,000

Less Manufacturing Overhead       ($7,000)

Less Labor ($7,000 × 100 /80)        ($8,750)

Direct materials charged                  $9,250