Question

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system

	April 30	May 31
Inventories
Raw materials	\(43,000	\)   52,000
Work in process	10,200	21,300
Finished goods	63,000	35,600
Activities and information for May
Raw materials purchases (paid with cash)		210,000
Factory payroll (paid with cash)		345,000
Factory overhead
Indirect materials		15,000
Indirect labor		80,000
Other overhead costs		120,000
Sales (received in cash)		1,400,000
Predetermined overhead rate based on direct labor cost		70%

Compute the following amounts for the month of May

1. Cost of direct materials used

Short answer

1. Cost of direct material is $186,000

Step-by-step solution

Meaning of Manufacturing Business

A manufacturing company refers to a company in a manufacturing process whose primary work is to change the raw material into finished goods using material, labor, and machinery.

Computingtotal raw material used

Particulars	Amount
Beginning raw materials inventory	$43,000
Plus: Purchases	210,000
Raw material available	253,000
Less: Ending raw material	(52,000)
Total raw materials used	201,000

Step 3:Computing Cost of direct materials used

Particulars	Amount
Total raw materials used	201,000
Less: Indirect materials used	(15,000)
Cost of direct material used	$186,000