Question 8 Montgomery, Inc., which uses a job-costing system, is a labor-intensive firm, with many skilled craftspeople on the payroll. Job no. 789 was the only job in process on January 1, having costs of $22,500 as of that date. Direct materials used and direct labor incurred during January were: Job No. 789 790 791 Direct Materials $ 2,000 9,000 14,000 Direct Labor $ 6,000 10,000 8,000 Job no. 791 was the only job in production as of January 31. Required: A. Should Montgomery use direct labor or machine hours as a cost driver. Why? B. Assume that the company decided to use direct labor as its cost driver. If the budgeted amounts of direct labor and manufacturing overhead are anticipated to be $200,000 and $300,000, respectively, what is the firm's predetermined overhead rate? C. Compute total cost - Job no.791