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Direct Materials Used, Cost of Goods Manufactured In September, Lauren Ashley Company purchased materials costing $200,000 and incurred direct labor cost of $120,000. Overhead totaled $325,000 for the month. Information on inventories was as follows: September 1 September 30 Materials $120,000 $130,000 Work in process 80,000 90,000 Finished goods 70,000 65,000 Required: 1. What was the cost of direct materials used in September?

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Answer:

Direct material= $190,000

Explanation:

Giving the following information:

Lauren Ashley Company purchased materials costing $200,000.

Inventories:

September 1= 120,000

September 30= 130,000

To calculate the amount of direct material used we need to use the following formula:

Direct material= beginning inventory + purchases - ending inventory

Direct material= 120,000 + 200,000 - 130,000= $190,000

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