Question

McGown Corp has the following information: Beginning Inventory (1/1) Ending Inventory (12/31) Raw Materials Inventory $ 20,000 $ 30,000 Work in Process Inventory $ 15,000 $ 18,000 Finished Goods Inventory $ 30,000 $ 20,000 Additional information for the year is as follows: Raw materials purchases $ 100,000 Direct labor $ 75,000 Manufacturing overhead applied $ 80,000 Indirect materials $ 0 Compute the direct materials used in production.

Answer 1

The direct materials used in production is $90,000.

What is direct materials?

In accounting, a direct material refers to materials that are used during the manufacturing of a product,

Direct material used = Raw materials purchases + Beginning raw material inventory - Ending raw material inventory

Direct material used = $100,000 + $20,000 - $30,000

Direct material used = $90,000

In conclusion, the direct materials used in production is $90,000.

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