Lexie Lou Industries applies manufacturing overhead to its cost objects on the basis of 75% of direct material cost.If Job 17X had $72,000 of manufacturing overhead applied to it during May,the direct materials assigned to Job 17X was:
A)$54,000.
B)$72,000.
C)$96,000.
D)$126,000.

Question

Quizplus · Accepted Answer

To find the direct materials cost, divide the manufacturing overhead by the overhead rate: $72,000 / 0.75 = $96,000.

Lexie Lou Industries Applies Manufacturing Overhead to Its Cost Objects