Lupe made a down payment of $2200 toward the purchase of a new car. To pay the balance of the purchase price, she has secured a
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Answer:
A. $5,250
Explanation:
As for the provided details we have,
The total cost of work in process on 31 March = $14,000
In this amount included as cost of direct labor = $5,000
This means the remaining amount $14,000 - $5,000 = 9,000 relates to cost of direct material and cost of manufacturing overheads.
Also provided that manufacturing overheads are applied using the predetermined rate of 75% of direct labor.
Thus, amount charged to work in process inventory for manufacturing overheads shall be $5,000 direct labor cost 75% = $3,750
Thus, direct material cost in work in process = $14,000 - $5,000 - $3,750 = $5,250