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The correct option for the cost of raw materials purchased is $714,000.
Solution:
Statement showing the computation of cost of raw material purchased
Ending raw material inventory of $150,000
Add: Cost of direct material used $690,000
Less: Beginning raw material inventory $(126,000)
Cost of raw material purchased $714,000
Conclusion:
Hence the cost of raw material purchased is $714,000
Hence the correct option is $714,000.
Purchases of raw materials, consumables and offerings are purchases of all commodities used as inputs inside the manufacturing technique and of offerings related to the supply of factors of production, inclusive of renting belongings or system, leasing, brief group of workers, and, in general, all outside offerings purchased for personal use (protection body of workers, cleaners and many others.).
Waterway Industries has a beginning and ending raw materials inventories of $126000 and $150000, respectively. If direct materials used were $690000, what was the cost of raw materials purchased?
A. $720000.
B. $714000.
C. $690000.
D. $666000.
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