Question

Use the following information to compute the cost of direct materials used for the current year. Assume the raw materials inventory account is used only for direct materials. (Assume no indirect materials.)

January 1 December 31
Inventories Raw materials inventory $7,600 $9,600
Work in process inventory 14,600 9,000
Finished goods inventory 10,500 5,900
Activity during current year

Materials purchased $123,500
Direct labor 96,000
Factory overhead 40,800

Answer 1

Answer:

Cost of direct materials used $121,500

Explanation:

Raw material inventory $7600

Add material purchased $123,500

Raw material available for production $131,100

Less raw material inventory $9,600

Cost of direct materials used $121,500