Question

Dacosta Corporation had only one job in process on May 1. The job had been charged with $2,550 of direct materials, $6,990 of direct labor, and $10,146 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $19.90 per direct labor-hour.
During May, the following activity was recorded:

Raw materials (all direct materials):
Beginning balance $ 9,250
Purchased during the month $ 38,750
Used in production $ 40,050
Labor:
Direct labor-hours worked during the month 2,650
Direct labor cost incurred $ 25,260
Actual manufacturing overhead costs incurred $ 34,050
Inventories:
Raw materials, May 30 ?
Work in process, May 30 $ 17,132
Work in process inventory on May 30 contains $3,876 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.

The balance in the raw materials inventory account on May 30 was:

Answer 1

Answer:

The balance in the raw materials inventory account on May 30 was $ 7,950.

Explanation:

This question requires us to calculate the balance in the raw materials inventory account on May 30. The detail about inventory purchase during the period, inventory consumed in production and opening inventory balance is given in the problem. We can easily calculate closing balance using following equation.

opening inventory + purchase = closing balance + inventory cosumed

9,250 + 38,750 = closing balance + 40,050

closing balance = $ 7,950