Question

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $23,500 and the ending balance was $43,000. Raw materials purchases during the month totaled $70,000. Manufacturing overhead cost incurred during the month was $114,500, of which $2,700 consisted of raw materials classified as indirect materials. The direct materials cost for May was:

Answer 1

$47,800

Step-by-step explanation:

Direct materials cost= beginning raw material inventory + raw material purchases - ending raw materials

$23,500 + $70,000- $43,000 - 2700 = $47,800

Answer 2

Direct Materials Used In May $ 50,500

Step-by-step explanation:

Bottum Corporation

We add the beginning inventory with the purchases and subtract the ending inventory to get the direct materials used.

Beginning balance Raw materials $23,500

Add Raw materials purchases $70,000

Less Ending balance Raw materials $43,000

Direct Materials Used In May $ 50,500

The cost of the purchases remains the same that is $ 70,000 but the direct materials used during May are $ 50,500