Question

Watson Company has the following data: work in process beginning 18,000; work in process ending 25,000: direct labor costs incurred 5,000; Cost of goods manufactured 9,000; and factory overhead 7,000. Calculate the amount of Direct Materials Used.

Answer 1

Answer:

Direct materials= $4,000

Explanation:

Giving the following information:

work in process beginning 18,000

work in process ending 25,000

direct labor costs incurred 5,000

Cost of goods manufactured 9,000

factory overhead 7,000.

To calculate the direct material we need to use the formula for the cost of goods manufactured:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

9,000= 18,000 + direct materials + 5,000 + 7,000 - 25,000

9,000= 5,000 + direct materials

4,000= direct materials