Solution:
If 2 pounds of direct materials are used to make one unit of finished product, then 115,000 units × 2 lbs, or 230,000 lbs were used at $0.65 per lb of direct materials i.e. ($149,500 ÷ 230,000 lbs.).
The Formula for calculating Ending Direct Material Cost =
[Ending Direct Material Inventory * Cost per lb]
Therefore, Ending Direct Materials cost is 1,900 lbs. * $0.65 = $1,235.