Stock Co Uses a Job Costing System Stock Applies Overhead to Production at a Predetermined Rate of (Credits)

Stock Co. uses a job costing system. The following debits (credits) appeared in Stock's work-in-process account for the month of April:
$\begin{array}{clc}\text { April } & \text { Description }& \text { Amount }\\1 & \text { Balance } &\$4,000\\30 & \text { Direct materials } &24,000\\30 & \text { Direct labor } &16,000\\30 & \text { Factory overhead }&12,800 \\30 & \text { To finished goods }&(48,000) \end{array}$

Stock applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30 has been charged with direct labor of $2,000. What was the amount of direct materials charged to Job No. 5? (CPA adapted)

A) $3,000.
B) $5,200.
C) $8,800.
D) $24,000.

Correct Answer:

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