Question

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $27,000 and the ending balance was $50,000. Raw materials purchases during the month totaled $77,000. Manufacturing overhead cost incurred during the month was $118,000, of which $3,400 consisted of raw materials classified as indirect materials. The direct materials cost for May was:

Answer 1

Answer:

The direct materials cost for May was $50,600

Explanation:

The computation of the direct materials cost is shown below:

= Beginning balance of raw material + purchase during the month - indirect raw material - ending balance of raw material

= $27,000 + $77,000 - $3,400 - $50,000

= $50,600

For computing the actual amount of the direct material we have to deduct the indirect raw material and the ending balance too.