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?

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

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the third answer is correct.