Question

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

January 1 December 31
Inventories
Raw materials inventory $6,000 7,500
Work in process inventory 12,000 9,000
Finished goods inventory 8,500 5,500
Activity during the current year
Materials purchased $123,500
Direct labor 94,000
Factory overhead 39000

Answer 1

$122,000

Step-by-step explanation:

Computation for the cost of direct materials used for the current year.

COST OF DIRECT MATERIALS USED

January 1 Raw materials inventory $6,000

Add Materials purchased $123,500

Raw material available for production $129,500

($6,000+$123,500)

Less December 31 Raw material Inventory $7,500

Cost of direct materials used $122,000

($129,500-$7,500)

Therefore the cost of direct materials used for the current year is $122,000