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5 October, 00:11

Requirement 1. Calculate direct materials inventory, total cost, December 31, 2014. Determine the formula, then calculate ending direct materials total cost. x = Ending direct materials total cost x =

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  1. 5 October, 03:26
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    Solution:

    If 2 pounds of direct materials are used to make one unit of finished product, then 115,000 units * 2 lbs, or 230,000 lbs were used at $0.65 per lb of direct materials i. e. ($149,500 : 230,000 lbs.).

    The Formula for calculating Ending Direct Material Cost =

    [Ending Direct Material Inventory * Cost per lb]

    Therefore, Ending Direct Materials cost is 1,900 lbs. * $0.65 = $1,235.
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