Use the following information for Multiple Choice Questions below:
Assume Towery Company uses a process costing system based on the weighted average method. Towery's accountant produces the following equivalent unit calculations for the month of July for the first department:
Also assume that the beginning inventory had accumulated $2,850 of materials and $7,930 of conversion costs in the previous month. Finally, assume that during the month of July, the average cost per equivalent unit of materials and conversion costs were $6.64 and $19.40, respectively.
-Calculate the current costs incurred for direct materials during the month of July.

Question

Use the following information for Multiple Choice Questions below: 
Assume Towery Company uses a process costing system based on the weighted average method. Towery's accountant produces the following equivalent unit calculations for the month of July for the first department:
  Also assume that the beginning inventory had accumulated $2,850 of materials and $7,930 of conversion costs in the previous month. Finally, assume that during the month of July, the average cost per equivalent unit of materials and conversion costs were $6.64 and $19.40, respectively.
-Calculate the current costs incurred for direct materials during the month of July.

Quizplus · Accepted Answer

[Not all information below pertains to this question.]
The solution requires a two-step process. First, calculate the total costs for direct materials by multiplying the average cost per unit by the total number of equivalent units for the item.
F1F1F1S1uf0b7F1F1F10Total direct materials costs = $6.64 per EUP x 5,700 equivalent units = $37,848.
Then, back into the amount of current costs added this year by subtracting the dollar amount added to beginning inventory last period.
F1F1F1S1uf0b7F1F1F10The cost of direct materials added this period = Total DM costs $37,848 - Cost of DM in beginning inventory $2,850 = $34,998.
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Use the Following Information for Multiple Choice Questions Below