Question

Chavez Corporation reported the following data for the month of July:

Answer 1

Answer:

Direct Material Cost for July=$60,600

Explanation:

The direct materials cost for July is is calculated as:

Raw Material in the beginning=$34000

Additional Raw materials purchases=$69500

Total Raw material Available=Raw Material in the beginning+Additional Raw materials purchases

Total Raw material Available=$34000+$69500

Total Raw material Available=$103500

Ending Raw material=$33500

Raw material used in production=Total Raw material Available-Ending Raw material

Raw material used in production=$103500-$33500

Raw material used in production=$70000

Indirect materials included in manufacturing=$9400

Direct Material Cost=Raw material used in production-Indirect materials included in manufacturing

Direct Material Cost=$70000-$9400

Direct Material Cost=$60,600

Answer 2

Answer:

The direct materials cost for July is $ 70,000

Explanation:

Direct Materials

Raw Materials Opening Inventory =$ 34,000

Add Purchases Raw Materials      = $  69,500

Less Ending Inventory Raw Materials= $ 33,500

Direct Materials cost available for use      =  $ 70,000

(Assume all raw materials are direct materials.)

Add Direct Labour                                      = $ 94,500

Add Manufacturing Overheads                   = $ 53,100 ( 62,500- 9,400)

Opening Work In Process                             = $ 19,500

Less Ending Work In Process                        =  $ 24,000

Work In Process                                                   $ 213,100