Simmons Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of $3,600. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is $15,000?

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The predetermined overhead rate is 90% of direct labor cost. The manufacturing overhead charged to Job 250 is $3,600. Therefore, the direct labor cost for Job 250 is $3,600 / 0.90 = $4,000. The balance in Work in Process inventory is $15,000. The direct materials charged to Job 250 is $15,000 - $4,000 = $11,000.