Lund Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company:
-The amount of direct materials cost in the March 31 Work in Process inventory account was:

Question

Lund Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company: 
-The amount of direct materials cost in the March 31 Work in Process inventory account was:

Quizplus · Accepted Answer

Ending work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied
$14,000 = Direct materials + $5,000 + $5,000 F1F1F1S1F1F1F10 75%
$14,000 = Direct materials + $5,000 + $3,750
Direct materials = $14,000 - $5,000 - $3,750 = $5,250

Lund Company Applies Manufacturing Overhead to Jobs Using a Predetermined