Question

Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

Answer 1

Direct material used= $16,000

Step-by-step explanation:

Giving the following information:

Beginning inventory= $5,000

Ending inventory= $12,000

Direct material purchased= 27,000 - 4,000= $23,000

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

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 5,000 + 23,000 - 12,000

Direct material used= $16,000