The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units? A. $9,000. B. $6,000. C. $3,750. D. $2,000. E. $4,000.

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter2: Basic Cost Management Concepts
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Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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The ending inventory of finished goods has a total cost of $9,000
and consists of 600 units. If the overhead applied to these goods
is $3,000, and the overhead rate is 75% of direct labor, how
much direct materials cost was incurred in producing these
units?
A. $9,000.
B. $6,000.
C. $3,750.
D. $2,000.
E. $4,000.
Transcribed Image Text:The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units? A. $9,000. B. $6,000. C. $3,750. D. $2,000. E. $4,000.
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