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Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in

Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $5,000. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20,000? The answer is $8,750. How do you get this answer?

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