Question

Buster Corporation, a manufacturing company, has provided data concerning its operations for September. The beginning balance in the raw materials account was $55,000 and the ending balance was $38,000. Raw materials purchases during the month totaled $75,000. Manufacturing overhead cost incurred during the month was $111,000, of which $3,000 consisted of raw materials classified as indirect materials. The direct materials cost for September was:

Answer 1

Direct material cost= $89,000

Step-by-step explanation:

Giving the following information:

The beginning balance in the raw materials account was $55,000 and the ending balance was $38,000. Raw materials purchases during the month totaled $75,000.

$3,000 was classified as indirect material.

The cost of direct material is the difference between the direct material used in production and the ending balance. We must not include indirect material:

Direct material cost= 55,000 + 75,000 - 38,000 - 3,000= $89,000