Watson Company Has the Following Data Calculate the Amount of Direct Materials Used

question 6

Essay

Watson Company has the following data:? $$\begin{array} { l r } \text { Work in process inventory, beginning } & \$ 18,000 \\\text { Work in process inventory, ending } & 25,000 \\\text { Direct labor costs } & 5,000 \\\text { Cost of goods manufactured } & 9,000 \\\text { Factory overhead } & 7,000\end{array}$$ Calculate the amount of direct materials used.

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Definitions:

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance payments.

Losing Money

Losing money describes a situation where an individual or business expends more money than is received over a certain period, resulting in financial loss.

Average Variable Cost

The sum of all costs that vary with output levels, divided by the total number of units produced.

Marginal Cost

The increase or decrease in total production cost when producing one additional unit of a good.