Question

Using the following information, compute the cost of direct materials used. Raw materials inventory, January 1 $ 50,000 Raw materials inventory, December 31 75,000 Work in process, January 1 30,000 Work in process, December 31 20,000 Finished goods, January 1 60,000 Finished goods, December 31 48,000 Raw materials purchases 900,000 Direct labor 690,000 Factory utilities 230,000 Indirect labor 80,000 Factory depreciation 500,000 Operating expenses 630,000 A.$875,000. B.$1,025,000. C.$925,000. D.$1,270,000.

Answer 1

Answer:

Direct material used= $875,000

Explanation:

Giving the following information:

Raw materials inventory, January 1: $ 50,000

Raw materials inventory, December 31: $75,000

Raw materials purchase= $900,000

To calculate the cost of direct materials, we need to use the following formula:

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 50,000 + 900,000 - 75,000

Direct material used= $875,000