Douglas, Inc

Multiple Choice

Douglas, Inc., employs a normal costing system.The following information pertains to the year just ended. Total manufacturing costs were $2,500,000. Cost of goods manufactured was $2,425,000. Applied manufacturing overhead was 30 percent of total manufacturing costs. Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost. Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31. Based on this information, what amount is the total cost of direct material used during the year?

A) $750,000.
B) $812,500
C) $1,000,000.
D) $2,450,000.
E) $2,500,000.