Chavez corporation reported the following data for the month of july:
inventories:
beginning ending
raw materials $ 34,000 $ 33,500
work in process $ 19,500 $ 24,000
finished goods $ 35,500 $ 50,500
additional information:
raw materials purchases $ 69,500
direct labor cost $ 94,500
manufacturing overhead cost incurred $ 62,500
indirect materials included in manufacturing overhead cost incurred $ 9,400
manufacturing overhead cost applied to work in process $ 61,500
any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.
required:
the direct materials cost for july is

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

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