Question

Compton Inc. has a beginning materials inventory balance for May of $27,500, and an ending balance for May of $28,750. Materials used during the month were $128,900. As a result, what is the cost of materials purchased during the month

Answer 1

Answer:

Purchases= $130,150

Explanation:

Giving the following information:

Beginning inventory= $27,500

Ending inventory= $28,750.

Materials used during the month were $128,900.

To calculate the direct material purchase, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 128,900 + 28,750 - 27,500

Purchases= $130,150