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. multiple choice question.

O $16,000
O $30,000
O $24,000
O $20,000

Answer 1

To calculate the cost of direct materials used, begin with the starting inventory, add purchases, subtract ending inventory and indirect materials, resulting in $16,000.

option a is the correct

Step-by-step explanation:

The cost of direct materials used during the period can be calculated by adding the beginning raw materials inventory to the total raw materials purchased and then subtracting both the ending raw materials inventory and the cost of indirect materials put into manufacturing overhead.

First, we add the beginning raw materials inventory of $5,000 to the total raw materials purchased worth $27,000, giving us $32,000. Next, from this sum, we subtract the ending raw materials inventory of $12,000 and the indirect materials of $4,000 put into overhead, resulting in a cost of direct materials used amounting to $16,000.