Question

White Company has the following information at the end of the current year: Beginning Direct Materials Inventory $12,000 Ending Direct Materials Inventory 10,000 Purchases of Direct Materials 15,000 Beginning Work-in-Process 5,000 Ending Work-in-Process Inventory 3,000 What is the cost of direct materials used?

Answer 1

Answer:

$17,000

Explanation:

Step 1: Determine the formula for the direct material used

= Beginning Direct Material Inventory + Purchases of Direct Materials - Ending Direct Material Inventory

The Work in progress values should only find expression Manufacturing Account Statement preparation of production cost.

Step 2: Fit the figures into the formula

Beginning Direct Material = $12,000

Purchases of Direct Materials = $15,000

Closing/ Ending Direct Material = $10,000

Cost of Direct Material Used = $12,000 + $15,000- $10,000= $17,000.

Note: Direct material are those raw materials in production or manufacturing that are directly used, related or traceable to the goods or products manufactured.