Question

Use the following information to compute the cost of direct materials used for the current year. Assume the raw materials inventory account is used only for direct materials. (Assume no indirect materials.)

January 1 December 31
Inventories Raw materials inventory $7,300 $7,800
Work in process inventory 12,400 9,400
Finished goods inventory 10,200 6,300
Activity during current year
Materials purchased $127,000
Direct labor 94,800
Factory overhead 44,700

Answer 1

$126,500

Step-by-step explanation:

Computation of cost of direct materials used

Raw materials inventory Jan 1

$7,300

Add:

Materials purchased

$127,000

Raw materials available for production

$134,300

Less:

Raw materials inventory December, 31

($7,800)

Cost of direct materials used

$126,500